All across the country, private employers are discovering a new way of controlling health care costs. It works so well that at some companies health care costs are actually going down. The secret: giving employees incentives.
Managed competition would make no sense unless most health care were delivered in health maintenance organizations (HMOs), employing the techniques of managed care. That is why most proponents of managed competition oppose traditional insurance and fee-for-service medicine. They want physicians to become agents of bureaucracies rather than agents of their patients, and they want medical practice to be determined more by computer-generated mandates than by the physician's best judgment.
Responding to polls that show crime to be the number one concern of Americans, Congress is about to act. What is certain to emerge is a bill providing for spending between $15 billion and $22 billion over the next five years.
Canada tries to control health care spending with price caps and global budgets similar to those proposed by President Clinton. How well does the Canadian health care system work? Not bad – as long as you're not sick.
We do not always spend health care dollars in the most productive way. The way we pay for health care encourages both patients and physicians to overuse resources. On the average, every time a patient spends a dollar on health care, 79 cents of it is paid by employers, insurance companies, government and charitable giving. That encourages patients to purchase services that they would not purchase if they paid the full bill.