Health care policy: lessons from the past and issues of the future

Liberal distributional values, the increasingly powerful capacity of medicine to provide more and better care, and concern about the health hazards of an industrial society fueled the vast expansion of the health care sector during the last 20 years. That growth was facilitated by a growing economy. The current health policy debate at one level reexamines the distributional bases of entitlement programs, and at another seeks alternative resource allocation mechanisms to reduce the cost of health care. This article has two themes. First, distributional and allocational policies are shown to be intrinsically related, so that the health policy debate is fundamentally a clash between liberal and libertarian values. Second, the inexorable social forces driving the health care system are shown to be the aging of the population and the rapid expansion of technology. The resulting dynamics imply the further growth of the health sector, now in the environment of a sluggish economy. Future policies will have to struggle with how to ration scarce health resources and how to reorient the health care sector to the problems of the aged.     

How many physicians are enough?

Although it is difficult to ascertain whether or not the nation faces an oversupply of physicians in the coming decades, there is no doubt that a health care system can be operated more effectively with a taut supply of medical personnel than with a loose supply. The perception of severe specialty and geographic imbalance, which informed national health policy during the 1960s and 1970s, has been modified by evidence of a significant redistribution in the supply. Increasing numbers of practitioners are likely to effect further escalation in the costs of physician services and total expenditures for health care, even if--in conformity with classical laws of supply and demand--individual physicians' incomes and the relative economic advantage of the profession were to decline. Since the objective of improved access has to a considerable extent been realized, the principal benefit of the loosened supply in the future will be to facilitate the initiation of innovative practice modes and alternative health care delivery systems that offer the potential of improved efficiency and quality.     

Purchasing power of U.S. Social Security benefits abroad, 1970-82

This article examines whether the small number of Social Security beneficiaries living abroad enjoy a higher standard of living than they would with the same benefits if they lived in the United States. The article addresses this question using two methods. First, absolute comparisons of U.S. dollar purchasing power abroad are made using "purchasing power parities," a method recently developed to allow international comparisons of real standards of living. Second, the effects of changes in Social Security benefit levels, exchange rates, and rates of inflation on the relative value of benefits abroad are measured. Both methods show considerable instability in purchasing power of Social Security benefits in the 1970's. Although beneficiaries in 1970 generally could live better abroad than in the United States, this advantage eroded considerably during the 1970's, followed by some improvement in 1981-82.