In the 1960s, the market experienced increased inflation and increased healthcare expenditures. On August 15, 1971, price controls were put into place. During the 1970s, the healthcare market continued to see increased prices, increased expenditures, decreased access, and increased premiums.
The employer-linked health programs could never serve as universal coverage because the incentive for profit eliminates high-risk individuals. What do these market conflicts look like?
- Payer: The act of denying a service increases its profit margin. The market movement for payers starts as shifting high-risk individuals out of the plan. This is a people shift. The second is a price shift. This may look like the “usual and customary” concept. The third is a service shift. This may look like not paying for preexisting conditions.
- Provider: The acts of prescribing and ordering a service, increases its profit margin. The shifts in this marketplace occur between “fee schedules” and prepayment fixed and prospective plans. The fee schedule type of payment tends to result in excessive treatment. The other shift is in the form of prospective payments, such as diagnosis-related groups and capitation. This is a predetermined amount. This tends to result in treatment being withheld. As private payers and vendors pass their costs on to the hospitals, the hospitals in turn go back to the government-sponsored programs for additional cost adjustments. In particular, charity write-offs and disproportionate ...