Hospital wage and price controls: Lessons from the economic

The Clinton Administration has implied that short-run failures to control health care costs may cause a reexamination of wage and price controls as elements of comprehensive health care reform. The most recent imposition of mandatory wage and price controls was the Economic Stabilization Program (ESP) of the early 1970s. Trends in hospitals' economic behavior and utilization before, during, and after ESP are analyzed. In addition, the relevant literature is reviewed to estimate ESP's impact, considering other factors that influence hospital behavior. Noting important changes in the hospital industry since the 1970s, it is concluded that ESP had limited effect and that similar controls would have little effect today.