Restoring Medical Markets: Implications for the Poor

Competition has become a popular prescription for the problem of rising health costs. One issue largely absent from discussions of market systems and medicine, however, has been analysis of the implications for the poor. This paper explores the implications of proposals to use health maintenance organizations and vouchers to promote competition. We conclude that, as they stand, pro-competitive proposals could cause a significant deterioration in the position of the poor, especially if costs continue to rise, and that their effects are likely to be exacerbated by problems with implementation.