In recent years capital spending in the health care industry has escalated tremendously, and most forecasters agree that needs will increase at an even faster rate throughout the 1990s. As a result of this trend, there is a dire need to develop effective and equitable controls on capital spending in health care. One of the capital payment options under consideration is the establishment of a lid on capital expenditures and the concomitant allocation of capital to health care providers whose applications are the most meritorious. The purpose of this article is to present some ideas and methods for the development of a relative need system to accompany a capital expenditure limit and to supplement and expand the absolute need determinations of the typical CON process.

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