Competition in health care. Where it has failed and why.

During the 1980s, it was expected that competition and deregulation would render health care more efficient and less expensive, but these measures have not worked. Rather, hospitals have become more expensive, HMO costs are increasing as fast as those for fee-for-service practices, access to care has deteriorated, cost-containment policies have reduced quality of care, and government regulation has increased instead of decreased. Examined in detail is the failure of supermeds (giant hospital corporations), HMOs, and marketing and advertising to lower costs and increase efficiency. The author discusses reasons why these methods failed and proposes solutions to the problems of rising health care costs.