Health Reform in the US

Abstract

The question has been asked about what kind of health reform will occur in the US. Will it be a radical transformation or muddling through? Muddling through in health policy is clearly the approach that is more consistent with American history and political traditions than radical reform. But how, and how fast, we muddle through is itself an interesting question. This paper explores the market and public policy forces that are likely to affect the future of health policy in the US. Will the US follow the example of the European countries by expanding public financing and control, or will it take a different approach based more on consumer choice and provider competition? As background, the paper reviews some important events that shaped the US healthcare system and explains why our current market situation complicates our ability to achieve efficient reform. It also discusses why the future of reform will be strongly influenced by how the market for health insurance develops over the next decade. If the new forms of high deductible, catastrophic plans combined with personal savings accounts meet the market test and are considered successful, this will give policy makers new options for expanding coverage to the uninsured and reforming Medicare and Medicaid. But, as we know from the history of other markets, much can go wrong. Some predictions about the future course of reform are offered.