How health networks and HMOs could result in public utility regulation

Health networks and HMOs--as strategies to reform the American health system--are considered by many elected officials and providers to be the most effective way to improve the delivery of medical care at a reduced cost. Strongly swaying these proposals are the fiscal pressures that now require us to harness such entitlements as Medicare and Medicaid. As these health networks and capitated payment approaches are being aggressively forged by hospitals, physicians, and insurers, the probable consequences are that one alliance will eventually dominate most geographic regions (except for our nation's largest metropolitan areas) and these oligopolies will tend to behave as a monopoly. More simply stated, this article argues that many healthcare markets will either evolve into monopolies or, at best, oligopolies.