ABSTRACT
A cost containment program initiated in 1975 on the medical teaching service of an 890-bed university affiliated hospital has led to a significant improvement in house staff utilization of facilities and procedures. During the first three and one-half years of the program the average length of stay on the general medical service was reduced by 21 percent; and the cost per admission rose at a rate of only 4.3 percent per annum, while the cost per admission on other services rose at an average rate of 14.5 percent per year. In the outpatient setting eliminating unnecessary laboratory procedures resulted in an actual reduction in patient-encounter cost initiated by interns despite price increases on all procedures. Overall cost advantage gained by reduction in utilization will rapidly be negated, however, if the current rate of inflation continues.
