Health Affairs, 23, no. 2 (2004): 22-24 doi: 10.1377/hlthaff.23.2.22 © 2004 by Project HOPE	New Online   House Health Reform Bill   Paying for Reform   Vetting AHIP's Report   HIV/AIDS Costs   Brief: Insurance Reform   HA Blog Top 10

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Health Reform

PERSPECTIVE

A New Policy Framework For Health Care Markets

The frustration with health care markets recorded in the paper by Len Nichols and colleagues reflects the general, and accurate, perception that these markets typically do not work well. But markets respond to the framework of rules and tax incentives in which they must operate, and in health care this framework works against efficiency. The sensible response is not to reject market-based approaches in health care as inherently ineffective in achieving efficiency and cost control. Nor is it to add yet another layer of rules and government micromanagement. It is instead to fix the framework so that markets will foster efficiency.

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