Policy reform as creative destruction: political and administrative challenges in preserving the public-private mix

Abstract

As political pressure for affordable universal coverage intensifies, various proposals have been crafted to improve the system without sacrificing the role of the private sector. Some analysts view the preservation of a mixed public-private system as an exercise in incrementalism, avoiding disquieting departures from familiar arrangements. A review of the political and administrative challenges of several main options--market innovation, tax credits, play or pay, and Medicaid expansion--suggests that the path to true reform is a slippery slope. Over time, changes in particular sectors, such as insurance, employers, government, and providers, will very likely implicate the others too. Although redefining the public-private mix may be more incremental than (say) adoption of a Canadian model, it will also entail considerable "creative destruction" of existing patterns and cannot fail to disturb the institutional status quo substantially.