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Competing to death: California's high-risk system.

D Socolar¹, A Sager, P Hiam

¹Access and Affordability Monitoring Project, Boston University School of Public Health.

The Journal of American Health Policy

|February 8, 1992

Summary

California's competitive healthcare market increased per capita spending and endangered citizens despite reduced hospital costs. This market-driven approach widened inequalities and raised expenses for all residents.

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Area of Science:

Health Economics
Public Health Policy
Healthcare Market Analysis

Background:

California's healthcare market aimed to control costs through competition.
Shifting care from hospitals aimed to reduce overall healthcare expenditures.

Purpose of the Study:

To evaluate the impact of healthcare competition on spending, coverage, and equity in California.
To analyze the consequences of market-driven strategies in the healthcare sector.

Main Methods:

Comparative analysis of healthcare spending per capita and insurance coverage rates.
Examination of hospital service changes and marketing strategies.
Assessment of the relationship between market competition and healthcare outcomes.

Main Results:

Overall health spending per capita in California rose to the second highest nationally by 1990.
Despite reduced hospital spending, high costs coexisted with low insurance coverage rates.
Hospitals discontinued essential services while promoting redundant ones to insured populations.

Conclusions:

Healthcare competition in California has not controlled costs and has exacerbated inequalities.
The pursuit of market principles in healthcare has led to financial strain and compromised patient well-being.
California's experience suggests limitations of free market models in addressing healthcare access and affordability.

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