Set hospital global budgets

Months 6–18; annual negotiation thereafter · UHA regional offices; Payment Rates BoardDiscuss this step

Every concrete action this step requires, who is responsible, and when it happens relative to enactment.

#	Action	Owner	When	Trade-off
1.8.1	Collect each hospital's audited 2-year cost reports, payer mix, case mix, and service lines.	UHA	Month 6–9	Using historical cost reports is objective but rewards hospitals that were already expensive.
1.8.2	Compute a base budget: Medicare-equivalent volume × 1.20, adjusted for case mix, teaching status, safety-net share, and rural isolation.	Rates Board	Month 9–12	Adjusting for case mix and teaching status is fairer but creates incentives to code patients as sicker.
1.8.3	Set volume corridors: budgets adjust up if volume rises more than 3% (to avoid rationing) and down if it falls more than 3%.	Rates Board	Month 9	Volume corridors prevent rationing but weaken the budget's cost control when demand surges.
1.8.4	Withhold 2% of the budget for quality performance: readmissions, hospital-acquired infections, patient experience, and wait times.	UHA	Month 12	A quality withhold rewards good outcomes but penalizes hospitals serving sicker, poorer populations.
1.8.5	Pay budgets in 26 bi-weekly installments; hospitals submit encounter data (not claims) for every patient.	UHA	Month 18+	Encounter data instead of claims cuts billing staff but reduces line-item detail for audits.
1.8.6	Separate capital: hospitals may not use operating budgets for construction or major equipment over $1M; they apply to the regional capital board instead.	UHA / regional boards	Month 18+	Separating capital budgets ends the arms race for profitable service lines but slows hospitals' ability to invest.
1.8.7	Create an out-of-region payment rule: hospitals receive fee-schedule payment for patients from outside their region (e.g., referrals to academic centers).	Rates Board	Month 12	Fee-schedule payment for out-of-region patients preserves referral centers but lets prestigious hospitals draw patients from local ones.