Paradox, change and choice: an economist's view of some current health care resource issues

Health care delivery is a major industry in the United States, consuming large quantities of human and physical capital and generating impressive quantities of products, ideas, trained personnel and health services. The focus of current public policy attention upon the medical profession, which has only in this century become a highly respected scientific profession, is not on its substantial accomplishments, but on the health care delivery system as a consumer (generator?) of over 10% of our annual gross national product. The overwhelming focus of current public policy and public sentiment is on cost containment (i.e., developing strategies to limit the flow of resources into the existing health care delivery system). This shift in public sentiment and new focus of public policy is, in some sense, a paradox in view of the spectacular advances in medical science and access to health care that the medical profession has delivered in the last 2 decades. The source of this anxiety and the cause of current initiatives in public policy and private practices with respect to health care is costs. The health care sector has not only consumed more resources than anticipated, but has also been characterized by unusually rapidly escalating prices and skyrocketing government resource commitments. As a result, we are asking new questions and seeking new initiatives. We are asking whether the institutions and practices that characterize the existing health care delivery system are the most suitable arrangements for our future. This article raises some of the issues entailed by these questions and details some of the choices which lie ahead for the health care industry.