Myths of competitive reform

During the 1980s, private economists and government policy-makers promoted market competition as a means of controlling costs and improving quality in the health services industry. However, inflation-adjusted costs rose faster during the 1980s than during the 1970s, and most of the expected benefits were not realized. Competitive reform failed because government and private payors were unwilling or unable to force providers to compete primarily on price and quality. Despite its failure to control costs, competitive reform has created a "mythology" that continues to influence health policy to the detriment of effective reform.