Selected Myths Guiding the Reagan Administration's Health Policies

Abstract

This article analyzes four major assumptions that guide the Reagan Administration's health policies: 1) the Administration received an overwhelming popular mandate to reduce the federal role in the U.S. health sector; 2) the size and growth of federal social (including health) expenditures are contributing to the current economic recession; 3) the costs to business of federally imposed health and safety regulations have contributed to making the U.S. economy less competitive; and 4) market intervention is intrinsically more efficient than government intervention in regulating the costs and distribution of health resources. Based on these assumptions, the main characteristics of the Reagan Administration's health policies have been 1) a reduction of federal health expenditures and, very much in particular, expenditures to the poor, handicapped, and elderly; 2) a weakening of federal health and safety regulations to protect workers, consumers, and the environment; and 3) the further privatization and commodification of medical services. This article shows that there is no evidence to support the assumptions on which these policies are based. Quite to the contrary, all available evidence shows the opposite: 1) the majority of Americans want an expansion of federal health expenditures and a strengthening of federal health regulation; 2) U.S. government expenditures and regulations are much more limited than those of other countries whose economies are performing more satisfactorily; and 3) those countries with larger government interventions have more efficient health care systems than the American one, where the “free market” forces are primarily responsible for the allocation of resources. Thus, major Reagan Administration health policies are based on myth rather than reality.