This work studies the effectiveness of hospital rate setting as a mechanism for cost containment and details the economic and political factors leading to its demise in three of the four states examined. Which matters more in crafting public policy - the blunt force of interest groups and lobbyists or the development of new ideas that make a difference? Are elected officials leaders or followers in promoting policy change? McDonough answers these questions in the context of the complex world of health care and uses the 30-year history of hospital rate setting as an example. The states covered in this volume are Massachusetts, New Jersey, New York, and Maryland. Characteristics of the subject states are provided in great detail along with case histories of rate setting in each. The book discusses the role of interest groups and policy ideas, examining two rival models: the theory of economic regulation and the punctuated equilibrium model of policy change.