The Market and Regulation: Where Community Forces Fit

Abstract

Last year's health reform debate showed us that there is widespread agreement about the problems in our health care system, but very little agreement about solutions. If you followed the national debate, you would have concluded that there are basically two schools of thought about how to reform our health care system. Marketeers believe that we should leave the job mainly to the private sector and build a better functioning health care marketplace. Regulators, on the other hand, believe that only government intervention and government cash can solve our health system's biggest problems. Crossing between these two camps are a large number of very reasonable people who see merit in aspects of both approaches and have been working to try and meld them together by figuring out what the proper role of government is, and what should be left to the marketplace instead. What is fascinating, provocative, and entirely admirable about Bob Sigmond's article is that he reminds us that there has been and apparently still continues to be a third school, one that believes that the answer lies not so much with government or the marketplace, but rather in planned attempts by community leaders at the local level to better and organize care and to make health rather than medical services our top priority. Certainly big problems that take tens of billions of dollars to solve cannot be solved by community initiative--like the problem of the 40 million uninsured. But the values embodied in Sigmond's vision are absolutely the right ones for our health system. The fact is that almost all of our efforts to health services at the community level--however imperfectly covered--have yielded either modest or disappointing results. Some of these have been inspired by government. For example, the kinds of community-based solutions and planning Sigmond advocates were also at the core of the health planning program of the 1970s. How many of you remember HSAs (health systems agencies), SHPDAs (state health planning and development agencies), and SHCCs (statewide health coordinating councils), the state and local health planning organizations charged with rationalizing health services at the local level? Not many, I suspect, because the idea, while well motivated, did not work. Other efforts have been inspired by the private sector. Sigmond himself led perhaps the largest attempt at community-based leadership and planning, a program called The Community Programs for Affordable Health Care, which was funded by the Robert Wood Johnson Foundation. I was the officer at that Foundation responsible for the program at the time. I greatly admired what the program was trying to do, but it failed. It is extremely difficult--if not impossible--for hospitals, doctors, businesses, government agencies, and just regular people in the community to work together when their interests flat out conflict. The closure of a hospital or hospital wing can be a great victory for a community health planner and a catastrophe for that hospital, its board and staff, and neighboring community. We learned in that program that communities have a desire for medical self-sufficiency that almost always puts them at odds with efforts to coordinate or plan--hence the need for external forces, be they the market or the government. Sigmond suggests that we keep trying for a coordinating entity at the community level that can work better than these and other past attempts. But history teaches that coordination without control of resources is a thankless task. Admonition and philanthropic instinct will go only so far in a trillion dollar health care system where leaders of health care organizations are rewarded according to the revenues they bring in and not the community health problems they solve. However, while it is probably wrong to believe that our health care system can be rationalized by some new kind of community entity, in a deeper sense, Sigmond is absolutely right that what ultimately happens in health care will be decided by people--if not coordinating agencies--at the community level. …