 Structured markets: Disciplining medical care with regulated competitionJames Capretta
AEI Economic Perspectives, 2021 Abstract: Medical care cannot be delivered efficiently or equitably through an unregulated market. Patients prefer insurance to out-of-pocket expenses, and insurance severs consumption from point-of-service pricing. Patients rely on expert practitioners to guide them rather than their own judgments. Further, costs are concentrated in high-cost cases that are far in excess of typical insurance deductibles. Acknowledging these complications does not mean full governmental control is the only answer. A blend of regulation and private incentives—a structured market—can drive out waste and improve outcomes more reliably than episodic political interventions can. Two conceptions of market-driven medical care offer contrasting visions. One sees agents (i.e., health maintenance organizations) competing to manage costs on behalf of premium-sensitive enrollees. The other elevates price-sensitive consumers shopping directly for well-defined and common medical services. These are not incompatible conceptions. Both require strong financial incentives for consumers and standardization to take the complexity of insurance and medical care out of price comparisons. Keywords: AEI Economic Perspectives; Health Care Costs; Health Insurance (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:aei:journl:y:2021:id:1008597827 Access Statistics for this article More articles in AEI Economic Perspectives from American Enterprise Institute Contact information at EDIRC. |
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