High and rising health care spending has prompted states to take a leading role in implementing strategies to control price and spending growth. One key example is the Oregon State Employee Plan’s hospital payment cap. The law caps hospital facility prices at 200 percent of Medicare payments for in-network services and 185 percent for out-of-network services for select hospitals. Modeling studies suggest that price regulation, such as Oregon’s payment cap, may be the most promising approach to control health care prices and spending. But no research to date has evaluated Oregon’s policy in its ability to control hospital prices. In Chapter 1, I evaluate the effect of Oregon’s hospital payment cap on inpatient and outpatient facility prices for the state employee population. The payment cap was associated with a 25.4 percent reduction in outpatient prices per procedure for the state employee population relative to the control group. It was not associated with a significant reduction in inpatient prices per admission over the post period but was associated with a significant reduction in the second year. Together, the price reductions led to an estimated 107.5 million in savings for the state employee plan over the first two years and four months of the policy, approximately 4 percent of plan spending. The price reductions associated with the payment cap may generate savings for the state employee enrollees by reducing their out-of-pocket spending. At the same time, lower prices at the point of service may increase service use. In Chapter 2, I examine whether the price reductions in the outpatient setting are associated with changes in out-of-pocket spending for the state employees enrolled in plans with higher cost-sharing (i.e., Oregon educators). I find that the cap was associated with a 9.5 percent reduction in out-of-pocket spending but a 4.8 percent increase in the number of procedures received per enrollee per year for the Oregon educators. I estimate that these reductions saved enrollees receiving outpatient services 2.1 million over the first two years and four months of the policy. But savings for the plan were 11.8 million less due to increases in enrollees’ service use. Ceteris paribus, price reductions from the payment cap will reduce hospital revenue. To maintain margins, hospitals may respond to this revenue loss through financial and operational changes that may impact access and quality. In Chapter 3, I examine changes in hospital revenue, finances, and operations, and patient access to and quality of care. I find minimal changes in hospital behavior over the first two years and four months of the policy, suggesting limited impacts on care. Collectively, I find that Oregon’s hospital payment cap reduced hospital prices and enrollee out-of-pocket spending, while having minimal effects on hospital behavior or patient access to and quality of care in the short term. This work suggests that hospital payment caps can be a model for other states aiming to control hospital price growth.