Book Description

President Clinton's health care reform proposals of 1993 represented the most far-reaching program of social engineering attempted in the United States since the passage of Medicare and Medicaid in 1965. Under the guise of reforming the health care system, the Clinton plan would have herded almost all Americans under age sixty-five into large, government-sponsored health insurance purchasing alliances that would have contracted with insurers to offer a standard set of benefits at regulated prices. The plan came under fire from both Republicans and Democrats, including moderates from both parties, but it soon became apparent that what doomed it was a public unwilling to trust government to manage their health care. The critical literature has failed to offer a cogent analysis of why government control of health care does not work. American Health Care delivers that analysis. This volume examines why untoward consequences usually follow when government sets out to do good things. The contributors demonstrate how hospital rate regulation raises hospital prices, that "no-fault" medical malpractice increases the occurrence of faulty medicine, and that FDA regulation is a major cause for the escalating cost of new drugs. Part 1, trace the genesis of Medicare and its later developments and argue the consumer advantages of medical savings accounts and written health contracts. Part 2, explore the fallacies of antitrust policies that serve the interests of competitors, attack community rating for making health insurance unaffordable to large numbers of young workers. Part 3, contains a powerful critique of the FDA for withholding vital information on the health benefits of aspirin and shows how HMOs and other plans have caused pharmaceutical marketing to shift its focus from medical effectiveness to cost effectiveness. The final section explores how the private sector is improving in the areas of regulating physician and other health professional fees and the supply and quality of health professionals. American Health Care proposes reasonable balances between government and market options for in supply of health services. Without denying the need for some governmental action, the contributors show how far the market can go farther in performing critical functions in the health care industry. This volume will be important reading for health policymakers, economists, and health care professionals. Roger Feldman is professor at the Institute for Health Services Research, University of Minnesota. Mark V. Pauly is professor in the Department of Health Care Systems of the Wharton School, University of Pennsylvania.