Regulating Health Care: From Self-Regulation to Self-Regulation?

Regulating Health Care: From Self-Regulation to Self-Regulation? Page 1165 Peter D. University of Michigan School of Public Health Debates over the role of government in the private economy date back to the emergence of the U.S. market economy in the early nineteenth century. At that time, the Federalists, led by Alexander Hamilton, argued that a governmental presence was needed to guarantee property rights, enforce contracts, and encourage the nascent entrepreneurial ethos (Sellers 1991). In contrast, the Jeffersonians argued against intrusive government and in favor of self-reliance. That dynamic intersection between economics and political theory continues today regarding the proper regulatory oversight of health care delivery. Arrow’s Theory The health care incarnation of this debate emerged when Kenneth Arrow (1963) identified key market failures in health care, namely “the existence of uncertainty in the incidence of disease and in the efficacy of treatment” (941). Underlying these failures were the “nonmarketability of the bearing of suitable risks and the imperfect marketability of information” (947) (i.e., information asymmetries between patient and physician), making it nearly impossible for patients to verify the quality of medical care. Arrow’s analysis presumes that health care markets will not reach a competitive equilibrium without nonmarket intervention but The author appreciates the financial support http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png Journal of Health Politics, Policy and Law Duke University Press

Regulating Health Care: From Self-Regulation to Self-Regulation?

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Publisher
Duke University Press
Copyright
Copyright 2001 by Duke University Press
ISSN
0361-6878
eISSN
1527-1927
D.O.I.
10.1215/03616878-26-5-1165
Publisher site
See Article on Publisher Site

Abstract

Page 1165 Peter D. University of Michigan School of Public Health Debates over the role of government in the private economy date back to the emergence of the U.S. market economy in the early nineteenth century. At that time, the Federalists, led by Alexander Hamilton, argued that a governmental presence was needed to guarantee property rights, enforce contracts, and encourage the nascent entrepreneurial ethos (Sellers 1991). In contrast, the Jeffersonians argued against intrusive government and in favor of self-reliance. That dynamic intersection between economics and political theory continues today regarding the proper regulatory oversight of health care delivery. Arrow’s Theory The health care incarnation of this debate emerged when Kenneth Arrow (1963) identified key market failures in health care, namely “the existence of uncertainty in the incidence of disease and in the efficacy of treatment” (941). Underlying these failures were the “nonmarketability of the bearing of suitable risks and the imperfect marketability of information” (947) (i.e., information asymmetries between patient and physician), making it nearly impossible for patients to verify the quality of medical care. Arrow’s analysis presumes that health care markets will not reach a competitive equilibrium without nonmarket intervention but The author appreciates the financial support

Journal

Journal of Health Politics, Policy and LawDuke University Press

Published: Oct 1, 2001

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