Competition versus regulation: its effect on hospitals

While factors other than competition and regulation influence hospital's behavior, these two strategies have dominated the health policy debate. To examine the impact of these two competing strategies on patients and hospitals, the authors examine experiences in Baltimore, which has followed a regulatory strategy since the early 1970s, and Minneapolis/St. Paul, which has pursued a competitive strategy during the same time frame. Compared with the national average, both strategies had only a minor impact on containing hospital costs per capita, but they influenced hospital productivity, cost per discharge, and utilization in different ways.