| This research, drawing on the literature of public administration, political science, and health economics, tests a model of hospital response to all-payer rate setting. The purpose of this research is to provide empirical support for a political economy theory of organizational response to regulatory policy. The sample for this pilot study is comprised of New Jersey, New York, Maryland, and Massachusetts, the only states to currently regulate the rates paid by all payers for acute care. The characteristics of the programs, however, are unique as each differs with respect to the unit of revenue, compliance, locus of authority, and coordination with other regulatory programs. A different systems research design is employed.; Surrogate measures are used to test the model in this time series analysis of annual secondary data for the period 1951 to 1984. A comparative political economy approach to organizations has been developed and is used to model organizational response. Supply of and demand for health services are specified as endogenous variables. The component systems of the hospital, its external and internal polity and economy, are specified as being exogenous. The supply variable (a surrogate for oganizational response) is the number of licensed short-term, general and special (nonfederal) hospitals in a state. The capacity of a political system to meet demand (need) for state financed health care goods and services is measured by aggregating annual expenditures for public health, hospitals, and Medicaid. It is modeled as a function of the previous level of demand and a state's total annual general expenditures. The model indicates that exchanges between environmental actors and hospitals are important. Specifically, the data for this pilot study suggest that relationships between interest groups, elected officials, physicians, and the capacity of the system influence hospital behavior in states with all-payer rate setting. |
