Approaches to Controlling the Costs of Medical Care: Short-Range and Long-Range Alternatives

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Abstract
Cost containment requires changes either in patterns of consumption or in the way services are provided. Although the former includes prevention, changing social expectations and finding suitable substitutes for some types of care, the latter involves mix of personnel, technologic inputs, auspices of care and the content of encounters. Ultimately, the future of medical care and cost containment depends on advances in biomedical and health-services research. In the short run, costs will be contained increasingly by rationing mechanisms. Whereas cost sharing is intended to affect consumer behavior, implicit rationing, as through capitation and prospective budgeting, is intended to encourage physicians to make tougher allocation decisions. Explicit rationing, in contrast, depends more on administrative decisions that limit physician discretion. A better understanding of the effects of different rationing technics on patient and physician behavior and the quality of care, as well as on cost, is required. (N Engl J Med 298:249–254, 1978)