Reform and remembrance: the place of the private sector in the future of health care policy

Although the nation failed during the past decade to enact large-scale, structural change in government health policy, it has seen health care in the private sector remodeled dramatically during the same period. In this article I argue that a new round of equally significant changes is quite possible, this time at the hands of the national government. More specifically, I argue that for a variety of reasons, both enduring and more recently born, support for the private sector and the market in health care is relatively weak: that given likely trends in costs, demographics, and inequalities, it is likely to get even weaker; and that in the potential coming crisis of the health care system. there will be a real opportunity for seizing the agenda and winning policy battles on the part of would-be reformers pushing large-scale, public sector-oriented changes that go well beyond the recent reform efforts directed at managed care and HMOs.     

Strategies to enhance price and quality competition in health care: lessons learned from tracking local markets

Drawing on observations from tracking changes in local health care markets over the past ten years, this article critiques two Federal Trade Commission and Department of Justice recommendations to enhance price and quality competition. First, we take issue with the notion that consumers, acting independently, will drive greater competition in health care markets. Rather we suggest an important role remains for trusted agents who can analyze inherently complex price and quality information and negotiate on consumers' behalf. With aggregated information identifying providers who deliver cost-effective care, consumers would be better positioned to respond to financial incentives about where to seek care and thereby drive more meaningful competition among providers to reduce costs and improve quality. Second, we take issue with the FTC/DOJ recommendation to provide more direct subsidies to prevent distortions in competition. In the current political environment, it is not practical to provide direct subsidies for all of the unfunded care that exists in health care markets today; instead, some interference with competition may be necessary to protect cross subsidies. Barriers can be reduced, though, by revising pricing policies that have resulted in marked disparities in the relative profitability of different services.     

Price competition in hospital markets: the significance of managed care

Anticompetitive conduct in the healthcare industry is often hard to detect, and has been ignored by some courts that appear to lack an understanding of managed care and its significance in maintaining price competition. These courts have adopted an approach that is far too historical and mechanistic, and is characterized by outdated factors analyzed in isolation from each other. In order to preserve effective price competition, the courts should embrace a realistic analysis that accurately reflects the workings of health services markets. This article describes the many facets of market power and anticompetitive conduct, and how they affect healthcare prices. The author then tums to an analysis of two recent hospital antitrust decisions, and critiques them for their failure to properly analyze the dynamics of local hospital markets.     

The changing locus of decision making in the health care sector

In the 1970s, the health policy debate focused on whether government or the medical profession should control the health care system. This article asserts that that struggle between two forms of centralized control was both less promising and less consequential than the devolution of decision-making authority upon consumers and their agents that is occurring today and that seems likely to continue as competitive forces become stronger and opportunities for meaningful consumer choice increases. What we are witnessing is the simultaneous deprofessionalization and depoliticization of important decisions affecting health care, a decentralization and diversification of the system that is opening new possibilities for translating diverse consumer desires into provider performance. Although covering much familiar ground, this article links a variety of seemingly discrete issues under the sterility of the competition-versus-regulation debate and to show the historical and ethical significance of the major changes that are under way in the health care sector today.     

Extortion,competition among states and private investment in a federation: evidence from Indian manufacturing sector

Economic Change and Restructuring - The paper argues both theoretically and empirically that incidence of extortion reduces the flow of private investment at a state in a federation. The states...     

The role of competition in health care: a Western European perspective

The Federal Trade Commission and Department of Justice 2004 report Improving Health Care: A Dose of Competition expresses a clear allegiance to competition as the organizing principle for health care. In Europe, by contrast, the key organizing principle of health care systems is solidarity. Solidarity means that all have access to health care based on medical needs, regardless of ability to pay. This is not to say that competition is not important in Europe, but competition must take place within the context of solidarity. This article critiques the report from a European perspective, describes the role of competition in Europe (focusing in particular on European Union law), and suggests that the United States could learn from the European perspective.     

Public markets, private orderings and corporate governance

In the New Property Rights approach the degree of incompleteness of markets is taken independently of the cost of the public ordering and of their efficiency relatively to private orderings. In this approach “public markets,” similarly to a Swiss cheese, are either assumed to be nonexistent empty holes (because of infinite third party verification costs) or assumed to be smooth and efficient (because of zero third party verification costs). When we allow for positive but not infinite third party verification costs we are necessarily pushed back to the insights of Commons, Coase, Fuller and Williamson. The degree of (in)completeness of public markets becomes an endogenous economic problem and managers can be seen as agents that make “second order” specific investments to run specific relations that cannot be efficiently handled by public markets. Managers and the public authorities build respectively private and public “legal equilibria” that set the working rules within which transactions can take place. Private and public legal equilibria are not only substitutes but also complements. This complementarity is an important source of the path dependency that characterizes the development of different legal systems. The framework is applied to GM’s acquisition of Fisher Body. We suggest that, contrary to the claims of the New property Rights approach, the advantages of the acquisition were not due to the superior incentives of the new private owners but should be rather related to the replacement of public markets by the new private ordering set up by Alfred Sloan.     

The challenge and imperative of private sector cybersecurity: An international comparison

Attacks on computers and information networks, both public and private, are disclosed in the news daily. Most recently, Apple, Facebook, and Twitter acknowledged that they were attacked and were now taking additional measures to secure their networks. In January of 2013, Kaspersky Labs reported discovering malware that not only targeted government information in Eastern Europe, former Soviet republics, and Central Asia, but also had been actively doing so since 2007. The scope of global cyber attacks is staggering and the solutions to securing property and protecting national security are illusive, in large part because infrastructure is owned and operated by private, rather than public, entities. Nations struggle with choosing the most effective strategy and potential regulation of the private sector in order to reduce overall cybersecurity risk. This paper reviews the nature of cyber threats, and compares the United States and European approach to promoting cybersecurity in the private sector. Furthermore, the paper discusses how different approaches can affect cybersecurity risk, and suggests a framework for visualizing the impact of law and strategy on security.     

Halfway competitive markets and ineffective regulation: the American health care system

Since the late 1960s the U.S. has attempted to develop a strategy for controlling the rate of growth of health care spending. During the 1970s this strategy relied heavily on various forms of regulation. Some regulatory programs were partially successful in moderating spending increases, but they generated significant opposition--particularly from powerful provider groups, who successfully convinced Congress and the states to dismantle most of the regulatory structure and to substitute various forms of competitive approaches to controlling spending. Some of these competitive strategies have been successful in increasing the efficiency of subsections of our health system. But they too have produced "losers," and the government has been pressured to enter the system to minimize their losses. The net result has been a political stalemate between halfway competitive markets and ineffective regulation. With the rate of health care spending growth near historic levels, it is likely that the 1990s will bring a return to a stronger role for government regulation. But it is unlikely that we are any more willing to tolerate the negative fallout from regulation today than we were in the 1970s, and therefore we predict that the proportion of GNP going to health care will continue to grow throughout the remainder of this century.