The U.S. health care economy: from guild to market in ten years.
The U.S. health care economy is changing with remarkable speed from the non-competitive guild system of the past 50 years to a competitive market stem. A more efficient industry, more responsive to consumer preferences, is emerging. National health care expenditures grew from 5.3 percent of GNP in 1950 to 10.7 percent in 1983. Three factors that were especially important contributors to this are now being changed. The first is the fee-for-service method of payment of providers. The second is the principle of 'free choice of provider', a medical-economic concept designed to assure that the payor has no bargaining power and that there will be no economic competition among doctors. The third is that most government subsidies were open-ended subsidies of marginal costs. Important changes took place in the early 1980s, and additional changes appear inevitable, that will bring the open-ended era to an end. These changes are setting in motion an accelerating process that seems sure to change the whole system of health care finance from fees for individual items of service reimbursed after the fact, to prospective payments for global units of care, with providers at risk for their use of resources, and from cost-unconscious 'free choice' of provider to cost-conscious choice among limited groups of selected providers contracting in advance. The likely outcome of the process appears to be consolidation of the medical care system into comprehensive health care financing and delivery organizations serving, perhaps, several hundred thousand to several million people each.(ABSTRACT TRUNCATED AT 250 WORDS)
D004465:Economic Competition; D004467:Economics; D004470:Economics, Medical / Q000639:trends*; D004526:Efficiency; D005380:Financing, Government / Q000639:trends; D014481:United States