BACKGROUND
Despite the excellent quality of American medicine at its best, there are tremendous areas of concern over the quality of medical care as delivered in the United States. A substantial proportion of the American people remain uninsured. There is concern that many people—perhaps most—are not meeting guidelines for control of blood pressure, serum lipids, and diabetes. There is concern that we as a society have not done a good enough job at seeking value. We fail to provide adequate care in some areas while lavishing resources in others. Finally, there is concern over the ability of society to continue to afford the care that is being offered. The Institute of Medicine has called for a medical care system that offers care that is
• Safe
• Effective
• Patient centered
• Timely
• Efficient
• Equitable.1
PROBLEM DEFINITION
There are significant problems in the way that medical care is reimbursed. In principal, all goods and services should be priced and paid for by the market mechanism of willingness to pay, governed by supply and demand. However medicine lacks this type of mechanism because the payers are disconnected from the consumers. We have come to see this as the way it should be for 2 interrelated reasons. The first is that very few in society could afford care for catastrophic conditions, such as bone marrow transplantation. The second is that many, perhaps most, people in our society view medicine as a right, much like grade school education or clean water, rather than as a commodity to be bought in the marketplace. This is not an indictment but rather a reflection of a realistic choice, and almost certainly the proper choice for society to make.2
The lack of a market mechanism, coupled with the aging population and technological advancement, is certainly a recipe for escalating costs. This situation is made worse if incentives for