Health spending by state: new estimates for policy making

A blended strategy using competitive and regulatory models

Whether the health field in the United States should have more competition or more government regulation is now at the center of the public policy debate. After examining the market-driven and regulatory models to constrain cost and improve access to care, this article argues against supporting either extreme and instead favors a blended approach where the emphasis is on practicality rather than ideological exactness. Such a mixed strategy is predicted to eventually gain acceptance, legitimacy, and momentum, since such a hybrid design is more consistent with America's cultural and political values.

Diabetes education infrastructure and capacity in hospitals and home health agencies in Maryland and Pennsylvania

In this study, questionnaire data were described regarding diabetes education program capacity in Maryland and Pennsylvania hospitals, health maintenance organizations (HMOs), and home health agencies (HHAs). Hospitals, HMOs, and HHAs in each state were asked to indicate whether they currently have a diabetes education program and, if not, whether they had such a program anytime within the past 10 years. Home health agencies were less likely to have had programs in the past and more likely to have recently established diabetes education programs. About half of hospitals currently without programs had a program sometime within the past 10 years. Hospitals in Maryland and Pennsylvania responded similarly; Pennsylvania HHAs were more likely to report having diabetes education programs than HHAs in Maryland. On the average, programs showed moderate levels of institutionalization. Respondents to the questionnaire believed that their programs would be sustained; these projections appeared to not be sensitive to availability of reimbursement.

Health care spending, delivery, and outcome in developed countries: a cross-national comparison

This study examines the trend of health care spending, availability and use of medical services, and aggregate health outcome of the 24 industrialized member countries of the Organization for Economic Cooperation and Development (OECD). Major differences between the United States and other OECD countries are highlighted and discussed. The results of the study demonstrate that, over the past four decades, the United States has been spending more and accomplishing less when compared with other industrialized nations. The United States needs to learn from the successful experience of other nations. Redesigning the system of health care delivery in the United States may be the only viable option to improve the quality of health care.

Managed care merged with the German model

The cutbacks in Medicare and Medicaid reimbursement, and the Republican takeover of Capitol Hill and the state legislatures as a result of recent elections, suggest that the payer-driven forces of managed care, capitated payment, and the regional networks (alliances) will serve as centerpieces to improve the organization, financing, and delivery of America's health services. These "voluntary" alliances that are now being forged as an amalgam of health providers and insurance underwriters, often foreshadow the powerful, geographically linked regional health networks that are evolving into oligopolies throughout the United States. As the Department of Justice and the Federal Trade Commission are unable to appropriately analyze the efficacy of most prospective mergers, the American health field increasingly can expect monopolistic environments. In this process, the public eventually may demand the formation of state health services commissions. Within this framework, the German decentralized, multipayer, multitier approach, which historically is self-governing and allows for negotiating reimbursement rates between insurers and providers, offers a preferred option to the traditional American public utility model.

State health care expenditures under competition and regulation, 1980 through 1991

OBJECTIVES

This paper examines health expenditure growth under two alternative policy approaches: competition-based managed care and state government rate regulation.

METHODS

Data are presented on cumulative growth in real per capita health expenditures between 1980 and 1991 so as to compare California, a state with a pro-competitive policy, with the US average and with four states with established regulation programs.

RESULTS

Real per capita expenditures for hospital services in the United States grew 54% between 1980 and 1991, while in California the growth was half the national rate, or 27%. Real per capita expenditures for physician services and drug expenditures in the United States grew by 82% and 65%, respectively, while in California these expenditures increased only 58% and 41%, respectively. California's growth rate was below that of all four regulatory states for all measures of health care cost inflation.

CONCLUSIONS

On the basis of these findings, a properly structured competitive approach could play a significant role in controlling health expenditures in the United States.

State health services commissions German style

After the health networks tied to HMOs are organized into oligopolies, and eventually fail to provide adequate access, social equity, and cost containment, public pressures will demand that state health services commissions be established to regulate market share, the scope of health services, reimbursement rates, and allowable profits. The German health system is multipayer, multitier, decentralized, self-governing, and allows providers and insurers to negotiate reimbursement rates without direct government involvement. Such a model would offer more competition among providers and less government regulation.

Clinton's health plan: Prudential's choice

President Clinton has proposed a managed competition model for health care reform. This strategy would accelerate the corporatization of U.S. health care resulting in more bureaucracy, less patient choice, and a health system owned by a few insurance giants. There is no evidence that competition or other central features of Clinton's plan can lower costs or improve quality. Because cost containment is doubtful, the promised expansion of coverage is unlikely to be implemented.

A single-payer system in Jackson Hole clothing

President Clinton's Health Security Act relies on government regulation, not market forces, to control costs. The act creates an entitlement to comprehensive benefits and places the federal budget at risk for total health care costs in order to achieve universal coverage; it creates a system of new state purchasing monopsonies; and it attempts to control costs with price controls on health plan premiums, set and administered by a National Health Board that would be part of the executive branch, not insulated from political considerations. We believe there is a better way.