Consistently rising demand for care and concurrently high barriers to entry for would be health services providers are two areas that successful cost containment strategies should address to lower the escalating costs associated with record expenditures. Previous policies targeted toward these issues have been somewhat successful in providing meaningful results in their own terms and arenas but have been largely ineffectual dollar for dollar in the macro market.

By permitting physicians assistants and advanced practice nurses to provide more complex care that previously only a physician could administer, policy makers were able to increase the number of suppliers of preventative and basic care services. According to the law of supply and demand, as more suppliers enter the market, price should decline. Simultaneously this move was also able to lower the costs associated with administering basic and preventative care by lowering the cost of labor in the production function. While it would be unethical to decry the opportunity for more people to access care under either scenario, ignoring the effects posed by subsequent demand for costlier secondary services might prove to be self-defeating if the intended measures were poised to lower costs.

Similarly, making policy to target the rising demand for health services without aiming the measures in a way that will not disturb the level of suppliers can prove equally self-defeating if suppliers end up leaving the market. Recent reductions to the amounts received by providers as reimbursements for care has heightened the barrier to entry of the market by providing less incentive for new providers to enter. Simultaneously this policy can prove to be inflationary in the long term as existing providers leave the market and no new providers enter.

Unfortunately it seems as if many times policy makers have had their hands tied behind their back by various interest groups who withhold pertinent information and disguise their true intentions. Having data that reflected true and accurate accounting statistics for the various players in the market would prove very useful for policy makers wishing to effectively and fairly address key issues. However, aside from logistical challenges associated with collecting the data, interest groups such as the American Medical Association and managed care most certainly will be unwilling to divulge proprietary information without the assurance of their constituents’ well being. It should certainly be noted that these challenges would likely be circumventable in a situation where only one hybrid payer/provider organization existed.

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