In the 1960s and 1970s, health planning formed a major theme of American health policy. Planners aimed to improve health services and make them broadly available while using resources efficiently. This article provides a history, both intellectual and political, of the origins of planning, its rise, and-in the face of mounting problems-its decline. The story also illustrates broader changes in the culture of policymaking in American health care. From the Progressive Era through the 1960s, reform-minded experts in health worked to advance the public interest. Thereafter, they increasingly left behind public-interest ideals and their underlying extramarket values in favor of organizing and improving health care markets. Whatever the deficiencies of traditional policymaking may be, this study suggests the need to resurrect extramarket values in health policy.

Among health services researchers, an "economizing model" of health care has eclipsed two traditional models, "social conflict" and "collective welfare." The older models emphasized social solidarity and distributive justice, but the newer one focuses on improving efficiency, minimizing risks borne by third-party payers, constraining cost increases, and improving the functioning of markets. This article examines one source of the economizing model, the work of several early and persistently prominent economists of health care, especially Mark Pauly, Martin Feldstein, and Joseph Newhouse and his colleagues at the Rand Corporation. In particular, it explores their role in transforming perceptions of health care from a set of special services into an ordinary commodity, in giving currency to apparently dispassionate as opposed to overtly value-laden analysis, and in according priority, among health services researchers and policy makers, to economists' traditional interest in fostering smoothly functioning markets. It exhibits their principal policy recommendation-income-graduate cost sharing-the sources and character of their modes of analysis, and the character of their influence on policy makers. The article concludes that the supposedly value-free economic analysis of health care rests on a cluster of values that inhibit the expression of social solidarity and the formulation of policies intended to foster distributive justice.

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