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Chapter 11: Health Care Policies

Study

Summary

Changing and reforming policies is always difficult, and health care is perhaps a particularly difficult policy field in which to produce change. There are a number of powerful interests--doctors, hospitals, pharmaceutical companies, and the like--with a direct interest in the area. As issues of universal coverage arise, business interests become concerned about the costs that may be imposed on them. Citizens also worry that by attempting to provide better medical care for the entire population, government may undermine the high quality of care that is currently available to the most fortunate segments of the society.

Although competition is appealing to many Americans as a solution to the problems we have identified in the health care industry, there may be difficulties in implementing the concept. The health care industry differs from other industries in important ways that reduce the utility of competition as a remedy for its problems. In particular, the dominance of professionals in determining the amount and type of care that patients consume makes the usual competitive mechanisms less applicable. Those characteristics of the industry may require a stronger role for the public sector if effective control over costs, quality, and access is to be attained.

Very little information on the price or quality of medical care is available to the consumer. Prices for health care services are rarely advertised; frequently the consumer does not even consider them when making decisions about care. In fact, in a somewhat perverse way, consumers often choose a higher-priced rather than a lower-priced service in the belief (often correct) that the more expensive service will be superior. And beyond hearsay, little information is available to patients about the quality of services provided by individual physicians or hospitals. The public sector has begun to intervene to make more information about health care quality available, and increasing competition among health insurers and health care providers has provided another source of information, albeit biased, but it is still difficult for the average consumer to make choices.

In addition, the provision of health care is in many ways a monopoly or cartel. Entry into the marketplace by potential suppliers is limited by licensing requirements and further controlled by the professions themselves, that is, by limiting the number of places available in medical schools. Thus, unlike some industries, the health care field makes it difficult for competition to develop among suppliers. One possible means of promoting competition would be to break down the medical profession’s monopoly by giving nurse practitioners and other paraprofessionals greater opportunity to practice, but the medical profession resists such changes. Hospitals increasingly compete for patients, however, and with that competition has come some greater attention to the quality of care.

Bringing about any significant reforms in the delivery of health services in the United States will be difficult because of the power of the professions, large medical organizations such as hospitals, and increasingly, managed care organizations. The strongest pressures are to preserve the status quo, although physicians are becoming increasingly concerned about the control that insurers exert over their practices in the name of cost containment. It may well be that only introduction of a large-scale reform such as national health insurance will be sufficient to break the existing system of finance and delivery to provide better and more equitable medical care for most Americans.

Review Questions:

1. Identify the executive branch departments that administer the major U.S. health programs. How has the federal government, through these departments, sought to regulate health care, services, or costs?
   



2. Identify and define the major problems of the American health care system.
   



3. Describe the major pursuits toward a system of national health care in the United States.