American Health Care: Government, Market Processes, and the Public Interest (Independent Studies in Political Economy)

President Clinton's health-care reform proposals of 1993 represented the most far-reaching social engineering attempted in the United States since the passage of Medicare and Medicaid in 1965. The Clinton plan would have herded almost all Americans under age sixty-five into large, government-sponsored health insurance purchasing alliances that would have offered standard benefits at regulated prices.

Despite the recent resurgence in proposals for such shunned policies, the critical literature has failed to offer a cogent analysis of why government control of health care does not work. American Health Care delivers that analysis. This powerful volume brings together fourteen leading experts in economics, law, history, and medicine to examine why untoward consequences usually follow when government sets out to do good things.

The book demonstrates, for example, how hospital-rate regulation raises hospital prices, that "no-fault" medical malpractice increases the occurrence of faulty medicine and that FDA regulation is a major cause for the escalating cost and long delays for new drugs. Part I, "Health Insurance and Finance", traces the genesis and development of Medicare and argues the consumer advantages of medical savings accounts and written health contracts. Part II, "Health-care Services", explores the fallacies of antitrust policies and attacks community rating for making health insurance unaffordable to young workers. Part III, "Drugs, Devices and Medication", contains a powerful critique of how FDA restrictions increase health risks, and critiques health-care regulations. The concluding part, "Health-care Personnel" explores improvements in private-section regulation of feesand the supply and quality of health professionals.

American Health Care proposes reasonable balances between government and market options to supply health services, showing how the market can go further in performing critical functions for the health-care industry. This