Why market-driven forces in our health industry might eventually stumble: what could happen then?

Abstract

The Republican takeover of Capitol Hill suggests that the payer-driven forces of managed care and the regional networks will serve as the centerpieces to improve the organization, financing, and delivery of our nation's health services. The "voluntary" alliances that are now being forged may stumble when attempting to restrain the inflationary spiral of Medicare and Medicaid expenditures and when seeking to finance the care of an increasing number of uninsured working poor and their dependents. The American health industry can anticipate experiencing increasingly monopolistically competitive environments. The public will eventually demand the formation of state health services commissions to foster a semblance of control. Within this framework, the German decentralized, multipayer, multitier approach, which is self-governing and allows for negotiating reimbursement rates between insurers and providers, offers a preferred model to the traditional American public utility model.