Posting date: September 7, 2005

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Health Affairs, 10.1377/hlthaff.w5.420
Copyright © 2005 by Project HOPE

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Competition In Health Care: It Takes Systems To Pursue Quality And Efficiency

¹ Alain Enthoven is the Marriner S. Eccles Professor of Public and Private Management, Emeritus, at the Stanford University Graduate School of Business in Stanford, California.
² Laura Tollen is a senior policy consultant at the Kaiser Permanente Institute for Health Policy in Oakland, California.

^*Corresponding author.

Abstract

Many stakeholders agree that the current model of U.S. health care competition is not working. Costs continue to rise at double-digit rates, and quality is far from optimal. One proposal for fixing health care markets is to eliminate provider networks and encourage informed, financially responsible consumers to choose the best provider for each condition. We argue that this "solution" will lead our health care markets toward even greater fragmentation and lack of coordination in the delivery system. Instead, we need markets that encourage integrated delivery systems, with incentives for teams of professionals to provide coordinated, efficient, evidence-based care, supported by state-of-the-art information technology.

Key Words: Business Of Health, Health Reform, Insurance - Employer-Based System, Managed Care, Managed Care - Consumers, Managed Competition, Health Spending, Insurance Market

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