Markets and Medicine by Giaimo Susan;

Author:Giaimo, Susan;
Language: eng
Format: epub
Publisher: University of Michigan Press

CHAPTER 6

Market Reform as “Unmanaged Competition”

The United States

On September 22, 1993, President Bill Clinton presented to Congress and the American public his vision for a sweeping transformation of the American health care system. With its guarantee of universal coverage through national health insurance, the president's Health Security Act would have marked a major expansion of the welfare state. And with its call for “managed competition,” a unique blend of market forces and government regulation, the Clinton plan would have substantially extended the reach of government authority in the health care system.

Clinton's bold proposals initially met with public enthusiasm and a willingness among many members of Congress to work with the president. Less than a year later, however, the Clinton plan and alternative proposals for national health insurance were dead. But if Health Security's fate signaled the repudiation of health reform led by government, it did not mean that change was dead. Rather, private employers took it upon themselves to fundamentally transform the governance arrangements in the health care delivery system in a wrenching process of “unmanaged competition,” which has radically reshaped the political bargain with physicians. This tortuous path of health care reform also had immediate implications for the partisan control of government and opened up a broader debate over the proper balance between state and society in providing for social protection.

This chapter explains how and why the United States ended up with this particular type of market reform. It chronicles Clinton's attempt to use government power to construct a health care market and to embed it in national insurance, and offers an explanation of why this endeavor failed. It then describes and explains the pattern of market reform by private actors that followed, concluding with a discussion of the consequences of this type of market reform for health care governance and for politics.

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