Hospital expenses in a sector model.

This review summarizes the capabilities and contributions of quantitative sector models for understanding trends in hospital expenses and the effects thereon of various public policies. After some brief historical notes on the use of analogous models in other policy areas, the general classes of national, partial, and narrow health sector models are introduced with special attention to method of validation and behavioral structure. Fourteen published models, described and critically reviewed with regard to these criteria, are assessed for their individual application to important policy and behavioral issues. Suggestions are offered for improvements and new initiatives in the use of sector models both in forecasting and in the study of procompetitive policies and reimbursement rule changes.