Competition: Does It Hurt Efforts to Control Costs
J. VJ Û¢ long. Hard bargaining has slowed or halted increases in large employersÛª costs, but federal and state costs and payments by individuals continue to escalate.</br></br>In any case, competitionÛªs effects on access and quality are likely to be dire. If market forces control health-care delivery, the number of uninsured and underinsured is certain to grow as employers restrict coverage of employees and early retirees and choice of providers.</br></br>Without legislative intervention, insurance companies will do more skimming. Free markets have no concern for equity, so the plight of the chronically ill, the poor and the unemployed will worsen.</br></br>Unless government intervenes, most regionsÛª markets will be dominated by a few large entitiesÛÓmostly investor-owned. These typically use 15 percent to 25 percent of premiums for corporate costs and profits, inevitably limiting services.</br></br>In theory, product quality in free markets is protected by informed consumer choice, but the reality of health care differs from economistsÛª abstractions.