The Feasibility of Managed Competition in the Reform of Health Care

The health care industry in the United States has been faced with increasing health care costs not only for consumers, but for providers, delivery services, the insurance industry, and care givers. In today\u27s economic environment, most small businesses cannot afford health care for their employees; at the same time, it has become increasingly difficult for larger businesses also. President Clinton has proposed a major reform of the U.S. health care system to guarantee that every single American citizen receives health care coverage. He has appointed his wife, Hillary Rodham Clinton, to head up the health care task force for reform. The President\u27s most favored means of reform for the U.S. health care system is a concept that involves managed competition. Managed competition is a concept developed by a professor at Stanford and an expert health care consultant, Alain C. Enthoven. There are many other proposals that include the concept of managed competition, and a Managed Competition Act was adopted in 1992. All of these proposals have been considered 1 by many as a way to reform health care and a way to control the increases in health care expenditures. Some of the questions this thesis will address are: •Should the government even get involved in regulating the health care industry given its track record and the exorbitant costs of running Medicare and Medicaid? •Can we truly insure every single American citizen? •Can we do it without disrupting the whole health care system, in a cost effective manner, while at the same time providing choice and quality care? •Should we streamline the present system and eliminate the massive amount of paperwork? •Is managed competition a starting point, or is it an answer to the health care crisis? •Is there a health care crisis in the United 2 States