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The simplest, best cure for our health-care crisis.

Could national health insurance (NHI) cap the explosive rise in medical costs and at the same time give everyone access to health care? More and more people believe so, and for the first time in 20 years NHI proposals are being taken seriously in Washington. But the author contends NHI proponents have misread the causes for America's health-care crisis, and have been misled in their search for a solution by the example of the Canadian health system. All we really need she says, is a home-grown reform that's surprisingly simple and remarkably inexpensive.

Canada↗

An empirical investigation of procurement contract structures.

This article presents a model of procurement contracting with asymmetric cost information and investigates whether two of the model's predictions are consistent with actual contracts between hospitals and California's Medicaid program. The article first tests for the presence of a fixed-price payment region where Medicaid's payments are independent of hospitals' actual (but unobservable) production costs and then tests whether the size of the fixed-price region depends upon expectations about hospitals' costs. To conduct these tests, the article must first estimate hospitals' "unobservable" costs attributable to Medicaid patients. The article finds evidence of a fixed-price region but cannot confirm that the size of the fixed-price region depends upon expectations about hospitals' costs.

Antitrust Laws↗

Staying single.

Can single-specialty group practices survive in managed-care markets? Specialists are seeking strength in large practices, which are better positioned to shield themselves from abrupt shifts in managed-care provider lists and to resist exclusive deals with hospitals.

Economic Competition↗

The impact of managed care on specialty practices.

With the primary care physician being the focal point for managed care, the relative status that specialists have enjoyed may be at an end. Cynthia S. Rowe, FACMPE, administrator for the Oregon Eye Care, investigates how specialists are faring under managed care and writes that without major re-engineering, they will face a tough road.

Economic Competition↗

Market dynamics 1995.

The healthcare industry last year saw a continuation of the market-based reform revolution. Competition and economic forces are squeezing dollars out of the system but at varying rates depending on where you are in the country. Health benefit and hospital cost variations appear to be directly related to managed care penetration. Treatment protocol variations may also be related to economic incentives. The question is, will the variations disappear over the coming years?

Delivery of Health Care↗