This article reviews the so-called competition strategy for medical care. It sets out the policy goals of the strategy and the problems in the present medical and insurance system that it seeks to address. It then describes several distinct formulations of the competition strategy, showing that it is not a single, rigid, monolithic approach, but rather a flexible combination of market-oriented approaches. Finally, it briefly discusses the technical and political problems and prospects of the strategy.
Get full access to this article
View all access options for this article.
References
1.
idem, “Toward Development and Application of a Qualitative Theory of Hospital Utilization,”Inquiry, 19:117-135 (Summer 1982).
2.
2. Fred Nobregaet al., “Hospital Use in a Fee for Service System,”Journal of the American Medical Association, 247:806-810 (12 Feb. 1982); John E. Wennberget al., “Conditions Explaining Hospital Admission,”Journal of the Maine Medical Association, 66:255-261 (Oct. 1975); idem, “Evaluating the Level of Hospital Performance,”Journal of the Maine Medical Association, 66:298-306 (Nov. 1975); Harold S. Luft, “How Do HMOs Achieve Their Savings?”New England Journal of Medicine, 298:1136-1143 (15 June 1978).
3.
Wennberg , “Small Area Variations in Use of Medical Services”; John P. Bunkeret al., Costs, Risks and Benefits of Surgery (Oxford: Oxford University Press, 1977).
4.
Barry Chiswick , “Hospital Utilization: An Analysis of SMSA Differences in Occupancy Rates, Admission Rates, and Bed Rates,”Explorations in Economic Research, 3:326-378 (Summer 1976).
5.
McClure , Reducing Excess Hospital Capacity; idem, “Toward Development and Application of a Qualitative Theory of Hospital Utilization.”
6.
6. McClure, Reducing Excess Hospital Capacity.
7.
7. Eugene Vayda, “A Comparison of Surgical Rates in Canada and England,”New England Journal of Medicine, 289:1224-1229 (6 Dec. 1973).
8.
Theodore McKeown , The Role of Medicine (London: Nuffield Trust, 1976).
9.
9. Nedra Belloc, “Relationship of Health Practices and Mortality,”Preventive Medicine, 2:67-81 (Feb. 1973).
10.
Council on Wage and Price Stability, The Complex Puzzle of Rising Health Care Costs (Washington, DC: Executive Office of the President, 1975).
11.
11. It is useful to distinguish two types of efficiency: microefficiency is the cost of each unit of service; macroefficiency is the average expenditure per capita necessary to produce a given level of health status in a population. A medical care system could have high microefficiency by producing each service efficiently, and yet still have low macroefficiency by utilizing more numerous and more complex services than conservative practice would suggest. The focus of policy should be macroefficiency rather than just microefficiency; the policy goals of the first section of this article reflect macroefficiency.
12.
12. Walter McClure, Comprehensive Market and Regulatory Strategies for Medical Care, report no. HRP-0902178 (Springfield, VA: National Technical Information Service, 1979), chap. 5.
13.
Walter McClure , “Structure and Incentive Problems in Economic Regulation of Medical Care,”Milbank Memorial Fund Quarterly/Health and Society, 59(2):107-144 (Spring 1981).
14.
and by Mark V. Pauly, National Health Insurance: An Analysis (Washington, DC: American Enterprise Institute, 1971).
15.
15. Joseph Newhouseet al., “Some Interim Results from a Controlled Trial of Cost-Sharing in Health Insurance,”New England Journal of Medicine, 305(25):1501-1507 (17 Dec. 1981); Anne Scitovsky, “Coinsurance and the Demand for Physician Services,”Social Security Bulletin, 40(5): 19-27 (1977).
16.
16. Charles Linket al., “Cost-Sharing, Supplementary Insurance, and Health Services Utilization,”Health Care Financing Review, 2(2):25-31 (Fall 1980).
17.
Alain C. Enthoven , “Consumer Choice Health Plan,”New England Journal of Medicine, 298:650-658 (23 Mar. 1978).
18.
Paul Ellwood and Walter McClure, “Health Delivery Reform” (Unpublished report, Inter-Study, Minneapolis, MN, 1976).
19.
19. Harold S. Luft, HMOs: Dimensions of Performance (New York: John Wiley, 1981), chap. 14; McClure, Comprehensive Market and Regulatory Strategies for Medical Care, chap. 4, sec. A.2.
20.
20. Luft, HMOs.
21.
and McClure, Comprehensive Market and Regulatory Strategies for Medical Care, chap. 4, sec. A.3.
22.
and idem, “Implementing a Competitive Medical Care System through Public Policy,”Journal of Health Politics, Policy and Law, 7(1):2-44 (Spring 1982).
23.
23. Jan B. Christianson and Walter McClure, “Incentives for Quality in a Restructured Medical Care System,”Policy Studies Journal, 9:271-278 (special issue 1980).
24.
24. F. Cunningham and John Williamson, “How Does the Quality of Care in HMOs Compare,”Group Health Journal, 1(1):4-13 (Winter 1980).
25.
Jon B. Christianson and Walter McClure, “Competition in the Delivery of Medical Care,”New England Journal of Medicine, 301:812-818 (11 Oct. 1979).
