All-payer ratesetting: down but not out

Abstract

In the United States, when the cost-containment paradigm shifted from regulation to competition, all-payer hospital ratesetting went out of favor. After reviewing the published literature and supplementing the existing literature with more current information, the author concludes that all-payer ratesetting is able to meet its multiple objectives of cost containment, reduction of the amount of cost shifting, improvement of access to the uninsured, and increased productivity. At the same time, all-payer ratesetting has not stifled the diffusion of competitive health care systems or new technology, and any impact on length of stay, admissions, and quality of care is small, if it exists at all.