Variations in health service use rates by geographic area have long interested researchers and policymakers. Typically, investigators comparing population-based health care utilization rates among geographic areas have demonstrated substantial variations in use among seemingly similar communities. One method of investigation is "small area analysis." Numerous areas in North America have been studied extensively using this technique. This research has attempted to document the amount of variation found in health care use rates among areas; determine whether or not there is a pattern to such use in high- versus low-use areas; and identify the variables that are associated with the variation and explain a portion of the variation. Beyond this, many researchers have attempted to ascertain whether such variables are associated with characteristics of the population, whether they reflect differences in access and need, or whether a substantial portion of the variation is associated with differences in the medical care system itself. This review discusses the methods used to define the areas, the dependent variables that have been studied and the patterns found within them, the independent variables that have been tested, the statistical methods and analysis procedures used, the results of each study, and the policy recommendations emanating from the research. More importantly, based on what has been learned, the paper provides researchers in small area analysis with a set of recommendations for both analyzing and reporting results. These recommendations are designed to facilitate the development of a common research methodology, increase the comparability across studies, and enhance the use of this technique in the health policy formulation process.

States are often touted as "laboratories" for developing national solutions to social problems. In this article we examine the appropriateness of this metaphor for comprehensive health care reform and attempt to draw lessons about policy innovation from recent state actions. We present evidence from six states that enacted major pieces of health care legislation in the late 1980s or early 1990s: Massachusetts, Oregon, Florida, Minnesota, Vermont, and Washington State. The variation in design casts doubt on the proposition that states can invent plans and programs for other states and the federal government to adopt for themselves. Instead, we argue that it is more accurate to think of states as specialized political markets in which individuals and groups develop and promote innovative products. We examine the factors that might create receptive markets for comprehensive health care reforms and conclude that the critical factor these states shared in common was skilled and committed leadership from "policy entrepreneurs" who formulated the plans for system reform and prominent "investors" who contributed substantial political capital to the development of the reforms. We illustrate different strategies that leaders in these states used to carry out the entrepreneurial tasks of identifying a market opportunity, designing an innovation, attracting political investment, marketing the innovation, and monitoring its early production.

During the past decade, an area of major policy activity among the states has been that of health care reform. As of May 1993, seven states--Florida, Hawaii, Massachusetts, Minnesota, Oregon, Vermont, and Washington--had progressed the furthest in enacting comprehensive statutes designed to expand health insurance coverage and slow the growth of health care costs. This article reviews the activities of these states to achieve health care reform and the lessons learned from those activities. The analysis focuses specifically on identifying the common problems addressed and determining the common factors that maximized states' opportunities for success. In all, some nine lessons are identified that have relevance for other states wishing to follow a similar road to reform. Most important among these are a "window of opportunity" for policy action, having entrepreneurial leadership to push the reform agenda forward, and support from key stakeholder interests. If these conditions of opportunity, policy entrepreneurship, and stakeholder commitment are met, a state can move forward in addressing key aspects of its health care reform agenda.

This paper traces the implementation of Michigan's program for hospital bed reduction through four phases in the critical first 30 months following enactment: standard-setting, plan development, plan approval, and legislative oversight. Procedural complexity and goal conflict complicated implementation from the start: what began as a simple proposal to close unneeded beds soon became enmeshed in efforts to address long-standing issues of equity in access to care. A combination of administrative, political, and economic factors peculiar to Michigan, as well as the more generic problems incurred in applying a regulatory approach to containing medical care costs, contributed to the difficulties encountered in implementing bed reduction. Long-range prospects for the program depend upon whether the modest results it is likely to achieve are deemed to be worth the costs incurred in administering it.

A variety of programs aimed at health care cost containment have been initiated at the state level. This article presents a case study of one state's effort to deal with health care cost issues, focusing on the formulation of adoption of legislation to reduce the number of hospital beds. The Michigan bed-reduction legislation was the creature of a coalition of powerful, organized "professional consumers" of health services who placed hospital cost containment on the political agenda and framed a solution. The provisions of the legislation were reshaped during the legislative process to grant concessions to a variety of interest groups, particularly the Michigan Hospital Association. Many additional criteria for determining excess bed capacity, some subjective, were added. Cost containment as a goal was, if not subordinated, at least made competitive with other goals--access to care, equity among types of providers, and quality of services. While the initial proposal was attractive as a seemingly simple extension of the certificate-of-need process within the existing regulatory framework, the legislation became increasingly complex in response to new issues raised by political actors who contributed to the shaping of the final version of the legislation. The formulation and adoption of Michigan's overbedding legislation appears to underscore what many other observers have noted: there are no purely technical solutions to health policy problems.