I. Introduction

Over the past twenty years dramatic changes have occurred in the health care industry. Between 1980 and 1993 expenditures increased from about 9 to almost 14 percent of GDP. Since 1993 spending has remained at about 14 percent of GDP, and health care spending in the U.S. has grown at an average rate of 5 percent, substantially below the 12 percent annual growth experienced in earlier years (Health Care Financing Administration, 2000). The emerging consensus is that the rapidly rising costs of the 1980s and early 1990s was driven primarily by technological change (Newhouse, 1992; Fuchs, 1996), and the slowdown in the mid-1990s was a one-time reduction in spending driven primarily by the emergence of managed-care health insurance. Recent reports suggest that health care expenditures are on the rise as technology continues to evolve (Health Insurance Association of America, 2001 ), and nursing shortages are again a concern (Freudenheim and Villarosa, 2001 ).