Commentary: Dynamics without Change: The New Generation

A quarter-century ago, Robert R. Alford (1975) surveyed health care reform efforts in New York and elsewhere and concluded that years of deliberations and actions were merely "dynamics without change" for ordinary citizens and communities. His criticism was directed at initiatives that promised better health care for all through areawide planning and mobilization of consumer voice to challenge the medical profession and its control of health care financing and delivery. To the degree that health care could be described as a market, there was little disagreement that political institutions were needed as a countervailing power to the intertwined interests of health professionals, hospitals and clinics, and insurers.

Today the policy paradigm is entirely different. Both professional dominance and comprehensive planning are defunct. Most policy analysts and policy makers accept markets and corporate management as an appropriate way to allocate health services and use regulatory tools to, on the one hand, strengthen market forces and, on the other hand, moderate some of their undesirable tendencies. The rise of managed care and market competition has produced dramatic change in many aspects of health care financing and delivery and accelerated a dramatic shift in power from providers to purchasers. Yet it is difficult to conclude that U.S. public policy has made any progress toward the basic goals of making health care more accessible and affordable for those who need it the most.

Before and after the demise of the Clinton plan for comprehensive health care reform in 1994, state policy makers took steps to make it easier for individuals and families who did not work for large employers to obtain and keep insurance coverage. The federal Health Insurance Portability and Accountability Act of 1996 followed suit, establishing minimum standards for access to insurance in both the group and nongroup markets. The articles in this symposium analyze the market for health insurance purchased by individuals and some of the more far-reaching state reforms in that market.

Although the reforms were designed with considerable expertise and the best of intentions, it appears they have produced little of real value even for their supposed beneficiaries. With or without reforms, Mark V. Pauly and Allison M. Percy acknowledge that "shopping for individual insurance will continue to be a difficult, anxious task, especially for above average risks." In addition, consumers continue to get less value for their insurance dollar if they must purchase coverage in the nongroup market. In the states that adopted reforms, there are generally fewer people insured, higher premiums, less generous benefits, and considerable uncertainty about future trends. Together with similar reforms in small group insurance, the individual market reforms represent a new generation of "dynamics without change" in the U.S. health care system. ¹

Market Ideology and Reality

The ideology of the new generation of health policy has two dominant strains. The first is to rely on markets to allocate goods and services. The second is to decentralize power, shifting it from private to private decision makers and from federal to state government. Markets are valued because they promote choice and minimize coercion. Referring to Deborah A. Stone's (1993) distinction between "actuarial fairness" and "social solidarity" as organizing principles for health insurance, Len M. Nichols argues that the state reforms manifest "a strikingly similar social solidarity vision among policy makers." Alexander K. Feldvebel and David Sky agree, noting that in practice, states have always adhered to market performance standards other than technical efficiency. Indeed, these reforms attempt to ensure that insurance will be available to the very people who need it most--consumers who are ill, disabled, endowed with bad genes, stuck with unsafe jobs, or otherwise have a higher than average chance of running up medical bills. ²

To argue, however, that the reforms reflect any significant commitment to social solidarity ignores the reality that policy makers are simply attempting marginal changes to existing markets and institutions...