ABSTRACT
This chapter examines global budgets and competition as cost control strategies. It discusses the use of global budgeting in other nations, evaluating its advantages and potential problems. The chapter focuses on the United States, with its own set of problems and opportunities, and contrast the global budget approach with the most prominent contemporary pro-competitive strategy, managed competition. It also discusses the ways in which the Clinton plan attempts to broker a compromise between global budgeting and market competition and highlights some of the unsettled questions about health care reform model. The initial budgets for hospitals at the inception of public insurance in Canada were based on each individual hospital's historical operating costs. The main attraction of global budgets is that they erect a firm fence around expenditures. The regulatory process may fail to register accurately public willingness to increase resources for health care, resulting in excessively austere global budgets.
