HCFA agenda. The new initiative under Medicare

The Reagan administration's Medicare policy is based on maintaining a high quality of care, reducing government's direct involvement in medicine, increasing choices for both beneficiaries and health care providers, and promoting competition and programmatic efficiency. The private health plan option (PHPO), an approach based on marked economics, offers beneficiaries the choice of retaining traditional coverage or participating through private health plans. At the same time, physicians may join private plans of their own choosing, plans that can have a large degree of control over quality assessment, utilization, and payment. The PHPO contains guarantees of quality, notably government regulation of the plans that accept Medicare beneficiaries and outside quality review. The administration is seeking to expand the number and types of private plans and to give the PHPO a fair market test.