The American ‘doc fix’: Incremental policy change and the growth of US healthcare spending

Abstract

The extraordinary growth of healthcare spending in the United States necessitates an incremental model of institutional change. Efforts to reduce social spending in the 1980s introduced strict cost controls on healthcare, yet this regulation was annually abated with temporary legislation known as ‘doc fixes’. We show that the institutions set up to control spending were slowly undermined through three mechanisms: the transformation of wider political and economic problems into technical ones, the ‘layering’ effect of repeated budgetary appropriations, and the moral arguments that sustained incremental spending growth. This case illustrates how creative responses to budget constraints may produce incremental change, driven by ideas about how markets and welfare should work.