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Reform of Health Care

March 31, 1993

The Times must have a tenuous grasp of recent history if it believes free-market forces will succeed in slaying the dragon of health-care inflation ("The Principles of Health Care Reform," editorial, March 20).

In deregulating health care, Ronald Reagan also sought to unleash free-market forces--and succeeded. PPOs and HMOs flourished and were able to negotiate "discounted" rates with health-care providers. Utilization fell to historic lows. The result was that prices skyrocketed. Medical inflation, ill-conceived capital spending and pure greed on the part of insurers and providers alike fueled unprecedented growth in the cost of care.

The Times itself recently reported that medical price (not cost) inflation reached a 30-year high in 1991, the year this statistic was last compiled. Medical prices in February, 1993, alone increased 1.7%. And all this has occurred despite the recent widespread acceptance of the kind of managed care that Clinton's new plans advocate.

"Managed competition" in the form of regional health-care networks, far from being a controller of costs, will be just another layer of private bureaucracy to share in the ever-bloating spoils.

The fact is, the only way a truly free market in health care can be achieved is by instituting a single-payer, national health-care plan. This payer will control costs by regulating and regularizing reimbursement. The free market will work to produce quality care as small, independent providers compete with one another to gain market share in the form of the patients they enroll.

CHARLES J. SCHWARTZ

Venice

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