Competition in the health sector: a historical perspective

Viewed from a historical (and a theoretical) perspective, current "pro-competition" policy proposals are unbalanced in their emphasis on promoting "free market" behavior by consumers rather than by suppliers in the health services market. A comprehensive competition policy would require removal of supply-side restraints on health providers. Based on evidence about the evolution of restraints on physicians, dentists, and optometrists in one state, this article speculates on the political feasibility of removing supply-side restraints and thereby implementing a true "competition policy". Historically, the political environment and the alignment of interest groups have favored the promulgation of stringent restraints on health services providers. While the political environment is more receptive to challenges to those restraints today, there is little evidence that such challenges will succeed at either the state or federal level.