Incentives vs. Controls in Health Policy: Broadening the Debate

By Jack A. Meyer; American Enterprise Institute for Public Policy Research | Go to book overview

suggested that an increased supply of information in the hospital marketplace might have profound effects on the quality and cost of health care. Additional research on the magnitude of the effects is warranted.

Without information about the cost, quality, and safety of health services, consumers may select providers solely on the basis of a convenient location or the suggestion of other providers. With information, consumers can opt for doctors and hospitals that they believe are most likely to provide them with a successful health outcome. Even with a great supply of information, physicians' attachment to hospitals may create barriers to a perfectly rational distribution of health care resources. But the greater and more useful the information, the better will be the match between patients' problems and providers' capacity for solving them.


Notes
1.
Joseph P. Newhouse et al., "Some Interim Results from a Controlled Trial of Cost Sharing in Health Insurance;'" New England Journal of Medicine, vol. 305 ( December 1981), pp. 1501-7.
2.
U.S. Congress, Office of Technology Assessment, Forecast of Physician Supply and Requirements ( Washington, D.C., April 1980), p. 22.
3.
See, for example, "Midwives Seek Delivery from Discrimination," New York Times, August 7, 1983.
4.
"Medicare Rate Set for Hospice Care of Terminally Ill," New York Times, August 18, 1983.
5.
"Insurance Plan Considered Here Angers Doctors," Washington Post, August 23, 1983.
6.
Health Insurance Association of America, Source Book of Health Insurance, 1982-83 ( Washington, D.C.), p. 8.
7.
See Robert G. Evans, "Supplier-Induced Demand: Some Empirical Evidence and Implications," in Mark Perlman, ed., The Economics of Health and Medical Care ( London: Macmillan, 1974), pp. 162-73, for a contrary view.
8.
Lawrence J. White, Reforming Regulation (Englewood Cliffs, N.J.: Prentice Hall, 1981), p. 32.
9.
William G. Shepherd and Clair Wilcox, Public Policies toward Business ( Homewood, Ill.: Richard D. Irwin, 1979), p. 488.
10.
American Tobacco Co. et al. v. U.S., 328 U.S. 781 ( 1946).
11.
Ibid.
12.
Clark C. Havighurst, Deregulating the Health Care Industry ( Cambridge, Mass.: Ballinger, 1982).
13.
See the earlier attempts of the American Medical Association to stymie the growth of the Group Health Association in the late 1930s in American Medical Association v. United States, 317 U.S. 519 ( 1943). There have been additional incidents since this case. See Paul Starr, The Social Transformation ofAmerican Medicine

-105-

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