The American health care system embodies a complex amalgamation of fractured and conflicting parts. As such, any call to enhance quality or competition necessarily presupposes some ability to introduce greater harmony and coordination. But how does one make a complicated system work well? Dynamic theories of economics stress the significance of section mechanisms, learning, and adaptive modes of behavior in directing markets toward more efficient outcomes under conditions of uncertainty. Unfortunately, the American health care sector suffers from intense factional divisions. Policy makers need a more self-conscious understanding of the interactive and often conflicting effects of regulation if the health care system is to be reshaped in a manner that will generate more desired social outcomes. Evolutionary theories of economics can provide the conceptual framework in which such a restructuring could take place. This article examines how health care quality and competition can be improved through a better understanding of dynamic economic processes and evaluates the Federal Trade Commission and Department of Justice 2004 report Improving Health Care: A Dose of Competition in light of these perspectives.

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