California's Struggle
with Regulation
Sara J. Singer and Alain C. Enthoven
Government regulation is one of several tools for making the health care system function effectively to ensure high-quality, costeffective care. Market forces that include purchaser and competitor initiatives—driven by consumer preferences based on information and appropriate incentives—also regulate health care, as does the industry itself through self-regulation. Just as government should not be the only regulator of the health care industry, complete reliance on the free market for the distribution of health care is also inappropriate. Health care is far too complex for such an approach, and furthermore, for the needy to do without health care is morally unacceptable. To enable the market to achieve a tolerable result requires significant government regulation.
In California, regulation by government, the market, and the industry are all at work. In April 1997, then-governor Pete Wilson instructed members of the California Managed Health Care Improvement Task Force that their mission was to improve the state's largely market-driven and managed care-based health care system.
The authors' work on this chapter and on the California Managed Health Care Improvement Task Force was supported by a grant from the California HealthCare Foundation. We would like to gratefully acknowledge Maureen O'Haren, executive vice president, Legislative Affairs, California Association of Health Plans, for her assistance in the description of current California law.
-312-
