Competition Versus Regulation in Medical Care: An Overdrawn Dichotomy

This Article discusses these issues in considering the competitive approach to reforming medical care financing and delivery.Although the approach is an extremely promising one, strongly held individual and social values underlie the current system, and powerful private interests have a stake in the status quo. Reforms,therefore, may never be fully implemented or realize their theoretical potential in practice. In any case they will take some time to work; no approach can be an immediate panacea. If government is to embark upon a procompetitive course, it needs to proceed carefully. Especially during the transition to a more competitive system, we need to be particularly careful to create constructive incentives, whether through regulatory or competitive means, and not to get the worst of both worlds by inappropriately mixing them. This Article considers the sources of current cost problems,discusses regulatory and procompetitive responses, notes the lessons of today\u27s unproductive competition for future procompetitive efforts, and makes some policy suggestions