Building a Better Mousetrap: Healthcare Reform and the Arizona Program

Abstract:     
Considerable literature has suggested that the public would benefit by increased competition and decreased regulation in the provision of health care services. This call for reform of the health care delivery system is not surprising, given the impact of inflation in medical costs on all segments of society. The fundamental issue in health care today is whether government programs, such as Medicare and Medicaid, serve society better than a delivery system that mixes greater private involvement with a diminished governmental role and relies more on competition to produce efficient health care.

This article considers that issue. We begin with a discussion of the evolution of the present health care system, focusing on some problems affecting health care delivery and the unsuccessful regulatory responses designed to alleviate them. We then consider the movement for reform, both the economic arguments that support a competitive system and the specific policy changes that would be necessary to implement a workable market-based health care policy. Finally, we analyze Arizona's unique experiment with a mixed health care delivery system as an alternative to Medicaid. We conclude that the Arizona program provides a useful paradigm for reform of health care delivery systems by encouraging competition and incentive-based programs while diminishing the impact of inefficient government regulation.

Number of Pages in PDF File: 40

Keywords: health care reform, Medicaid, health law

Accepted Paper Series