HOSPITAL WAGE AND PRICE CONTROLS - LESSONS FROM THE ECONOMIC-STABILIZATION PROGRAM

The Clinton Administration has implied that short-run failures to cont rol health care costs may cause a reexamination of wage and price cont rols as elements of comprehensive health care reform. The most recent imposition of mandatory wage and price controls was the Economic Stabi lization Program (ESP) of the early 1970s. We analyze trends in hospit als' economic behavior and utilization before, during, and after ESP. We also review the relevant literature to estimate ESP's impact, consi dering other factors that influence hospital behavior Noting important changes in the hospital industry since the 1970s, we conclude that ES P had limited effect and that similar controls would have little effec t today.