Problems of resource allocation in United States medical care

Abstract

Medical care in the United States has been and in many ways still is directed by the free play of the market. Individual patients use their incomes as they choose to buy medical services; physicians derive their incomes from these fees and freely decide how much medical services to offer, how to specialize, and where to locate. These decisions may be made for all sorts of reasons, but certainly income is not irrelevant. Such a system for the allocation of medical resources has been largely abandoned in most other leading countries and is undergoing progressive modification in the United States. The state and local governments have always intervened to some extent in providing medical services to the poor; the spread of medical insurance, even though nominally private, has sensibly modified the earlier financial arrangements and motivations; and more recently the Federal government has intervened massively to finance medical services to the aged and to greatly increase those for the poor. Now it is clear that the country is on the way to some form of national health insurance. The only question is what form it will take. We may expect several years of vigorous debate among the contesting proposals emanating from all sides. But when a Republican administration comes forth to urge a definite permanent role for the Federal government in the provision of medical care to the entire population, the issue of principle has been resolved.