No abstract

The rapid rise in pharmaceutical benefits costs, often cited as a major contributor to the resurgence in health care cost growth, is beginning to strain the relationship between the pharmaceutical and the managed care industries in the United States. In interviews conducted in 1999, executives from both industries maintained a continued preference for a market-based resolution of these tensions. There is evidence, however, that this private-sector détente may give way in the face of the rising business and political pressures that both industries face. Active leadership will be required to prevent deterioration of the prevailing political climate toward economic controls.

Throughout the postwar era in federal health policy, policymakers have sought to expand both public and private insurance coverage, while wrestling with the cost consequences of the demand generated by the insurance-financing mechanisms thus created. This essay advances the view that the limits to insurance expansion have been reached and that public and private plan sponsors will henceforth continually "thin out" the coverage they offer. In this environment, policymakers seeking to mitigate access concerns may need to consider strategies that promote direct service delivery. This emerging regime, it is argued, will have important implications for the future of innovation in health care.

No abstract

Federal waiver programs enable states to bypass the requirements of federal programs such as Medicare and Medicaid to experiment with different ways of financing, organizing, and delivering health care. In tracking waiver activity from 1980 to 1990, the authors found that federal involvement with waivers lost momentum during the latter part of the 1980s, while state involvement increased. Three key issues dominate the discussion of waivers: administrative control, the role of the states, and the ability to evaluate demonstration waivers. Examination of the chronology of waiver activity suggests the emergence of a new era, wherein federal control reemerges as a way to counter the increased fragmentation of health policies among states. If this is the case, four areas need to be addressed: (1) balance of political and research objectives; (2) administrative flexibility for states; (3) careful scrutiny of rules; and (4) increased accountability. These recommendations can guide the federal government, with the states as partners, in its attempt to regain momentum in the use of waivers to expand the knowledge base.