Health care reform as an issue is based upon the idea that the current system is inefficient, broken, and biased. This is apparent in that 1 out of every 6 people is uninsured. According to Gilmer and Kronick (2005), this number is set to rise by 11 million by 2013. Detailed below are the major goals of whatever reform is brought about.

1. Broaden the population covered by private or public health insurance
2. Expand the array of health care providers consumers may choose among
3. Improve the access to health care specialists
4. Improve the quality of health care
5. Decrease the cost of health care
6. Decrease the cost of health insurance

While the public as a whole generally agrees on the above goals of reform, the plans to reach those goals are very different. On one hand, a group of individuals are calling for more government regulation. They face opposition though from a group that wants to reduce regulations and let the markets work. These groups have been deemed Theory X and Theory Y by Musgrave (1991). This first step, breaking down the human psyche, is crucial to understanding the issue as it effects daily life, news media, and political campaigns as we know them. Below is a table detailing the differences between these two groups.

View of

Theory X
Theory Y

Health and disease occur randomly
Health is determined by people's lifestyle choices
Medical Care

No different from any other good or service
The practice of medicine

A science
An art

Financial rewards reduce quality of caring
Financial rewards are responsible for generating high quality medicine

Regulations are needed to mitigate economic forces
Reduce regulations and encourage market forces

Tax the healthy, subsidize the sick
Tax the sick, not the healthy

Discourage new medical technologies
Encourage new medical technologies

This table is very simple, but breaks down the entire argument of regulated or market driven health care into just one question. That is, how is ones health determined? As noted, the X poeple argue that health and disease occur randomly. Those who are sick are not at fualt for their disease, and should therefor be helped (subsidized). The Y people would take exception to that claiming people determine their own health by the lifestyle they lead. The Y's point to smoking, eating, drinking, safe sex, and career choice all as determinants of health that consumers can change. So basically, the argument is whether poeple are responsible for their own health. The same argument exists with welfare.
The next row in the table is poeple's view of medical care. The X's say it is a special service because of; inelastic demand, ignorance, not for profit hospitals, and the strong presence of government. The X person would believe that health care workers, IE doctors, pharmicists, insurers, are greedy and therefore the cause of rising health care costs. Disagreeing with that are the Y's who look at the health care industry as simply another good/service that should be controlled by the Smith's 'invisible hand'. The Y feels highy profitable companies in the US healthcare field reflect a successful market. These profits can then be turned into research and development, producing better drugs and care. This is reflected in the Economics section of the above table. Where Y's believe profits equal higher quality care, X's believe it just makes those greedy health care professionals even more wealthy while ripping off the disadvantaged. The remaining table is fairly sef explanatory and concludes by stating three genral policies either the Y or X would push for. It is easy to see why this topic is so comustable. It deals with human life and has formed two groups that are polar opposites.

Federal Level
Currently, there are four generic proposals held by much of the American public surrounding federal health care reform. Those are:
1. Managed Competition
2. National Health Insurance
3. Medical Savings Account
4. Individual Mandates

Managed competition
In respect to the idea of universal coverage, this plan would seek to provide medical coverage to full time workers. Families of low income would also be covered through the use of subsidies, making health care affordable to them. Medicaid as well as medicare are left intact. All this adds up to nearly universal coverage. But who would pay for all this? For employees, helath care is financed through emplyer mandates meaning it would be docked from employee pay. Payroll taxes continue to fund the federal aid programs and subsidies. Proponents argue that the defecit effect would not be TOO big. In repect to containing the rising cost of health care, managed competition seeks encourage that through a hihgly competitive private insurance market. This market would enforce 80% coinsurance rates by insureres, leaving the 20% as incentive for consumers to price shop. As far as employement effects, this would have an impact especially among low wage workers.

National health insurance
In this plan, universal coverage is simply offered through a national health care plan, covering all citizens. This enormous plan wuld be funded out of income taxes, which would likely rise tremendously. Employers would be forced to pay a tax equal to what they paid for their employees health insurance, a double hit for business owners. Multipayer systems would be a thing of the past. In the effort to maintain costs, a single pay system would be initialized which would decrease the administration and billing costs. Employment effects would in this case hurt the private insurance companies, who would go by the way side, and health care administration workers.

Medical Savings accounts
This program does not aim to ahcieve universal coverage as the previous two. It simply aims to make insurance premiums more affordable in respect to catastrophic plans. This is done through tax credits and subsidies. Individual contributions make up the majority of the financing of this plan, ending spending on medicaid and medicare. Thus, the deficit in theory would be reduced. The consumers actually create what is called a Medisave account, which encourages them to shop around for the best price as well as avoid sickness. The disruption to the employment market is minimal in this plan.

Individual mandates
This plan is implemented when the government guarentees through mandates that basic health insurance coverage is available nation wide. Premium payments through employers are the main financer of the plan in conjunction with a tax increase. The madicaid and medicare programs end at this point. Competition is key in reducing the cost of medical insurance. As far as employment effects, any distortions are kept to a minimal.

Which of the following is not part of the 4 generic national health plans being considered?
A.Medical Savings account
B.Individual Mandates
C.Government/consumer coinsurance
D.Managed competition
E.National health insurance
(Answer E)

Which of the following is not listed as a general societal need in health care reform?
A.Broaden population coverage
B.Improved quality
C.Reward the healthy
D.Decrease cost of insurance
E.All of the above
(Answer C)

In Theory Y would you likely hear the argument, "Greedy doctors are ripping off the disadvantaged and are the root of all health care problems!"?
True of False
(Answer False)

Sources Cited
Santerre, Rex and Neun, Stephen. Health Economics: Theories, insights, and industry studies 4th edition. Pg 532-543's.htm