has become increasingly less so as the industry has grown to the largest in the state, now covering well over half of all Californians. The regulatory structure it imposes was primarily designed in 1975 when the original Knox-Keene Act was passed, and the industry has evolved significantly since then. Given the size, the complexity, and the degree of public interest in managed care, the task force recommended the creation of a new regulatory agency, one devoted specifically to managed care organizations, whose leadership would have the expertise and vision necessary for effective regulation.
As we have seen, government need not and should not attempt to regulate the health care industry alone. Neither should a completely free market be left to distribute health care; because of market failures, it cannot do so in a morally acceptable way. But the market, made up of purchasers and competitors, the industry, and government together can structure an appropriate set of incentives that will create accessible, quality health care for consumers.
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Publication information: Book title: Regulating Managed Care: Theory, Practice, and Future Options. Contributors: Stuart H. Altman - Editor, Uwe E. Reinhardt - Editor, David Shactman - Editor. Publisher: Jossey-Bass. Place of publication: San Francisco. Publication year: 1999. Page number: 329.
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