Politicians, pundits, and health care providers have warned for more than three decades that the U.S. health care system was poised on the verge of a meltdown. In the 1980s and early 1990s, the principal concern among reformers was ensuring access to care for uninsured and underserved populations. By the 1990s, the focus of health care reform efforts had shifted to cost containment, as health care inflation reached "unsustainable" levels. The rising cost of medical care was reflected in exploding Medicaid budgets, higher taxes, cutbacks in domestic spending in other policy domains, and growing concerns about the economic competitiveness of American industry. The 21 centaury brought a new set of concerns. As managed care organizations (MCOs) applied new pressures on hospitals to control costs, consumers, physicians, and public officials clamored for new regulations to ensure that the cost -containment strategies employed by providers and third-party insurers would not undermine the quality of patient care. Continuing concerns about the state of the nation's health care system generated many promises from presidents and congressional leaders to enact comprehensive reform at the federal level, but produced few concrete results. In the absence of comprehensive national health care reform, state governments emerged as the principal source of policy innovation in health care policy-making (Melillo, K, 1994).
Despite common agreement over the need for reform, states have followed markedly different routes to control costs, increase access to health care, and monitor the quality of health care services. A number of states experimented with comprehensive reform programs in the late 1990s and early 2000, but persistent implementation and financing problems stalled most state efforts to achieve universal coverage or restructure how hospitals and providers were paid. In particular, several sweeping reform initiatives that proposed to implement statewide global budgets or expenditure caps for hospital and health care services were scaled back or abandoned soon after they were enacted...........
