ONE STEP AHEAD OF THE LAW: MARKET
PRESSURES AND THE EVOLUTION OF
M. Gregg Bloche
During the last two decades of the twentieth century, market forces recast both the politics and the institutions of American medical care. Managed health plans emerged as large players in the politics of health care provision, able to shape policy debate and regulatory decisions. The terms of mainstream debate over costcontrol policy shifted fundamentally, from the comparative merits of price controls, supply-side regulation, and competition among providers to the appropriate scope and design of regulatory constraints on competition among health plans and provider networks. Politically plausible discussion over expanding access to care shifted from European-style public provision of medical services or insurance to the merits of alternative government subsidy schemes for the purchase of private coverage.
American health care policy today thus presumes the primacy of markets. It frames, as its main subject of debate, the role of government in remedying market failures through selective regulation and targeted subsidies. But this debate itself presumes a government able to so act—a public sector able to specify social objectives, identify market failures, and craft interventions matched to current circumstances. Since the 1960s, government has failed to so act.1 Some have concluded that government is inherently incapable of intervening effectively in the health sphere.2 I am skeptical of this view and inclined toward the belief that a