WHAT KIND OF SYSTEM IS EMERGING?

These trends all indicate fundamental changes in the system for delivery of health care in the United States. Some key developments to watch for in the coming years are these:

•     The health care system will be dominated by fewer and larger providers.

•     Corporate interests will have a more important role in the delivery process.

•     There will be growing financial incentives to eliminate remaining unnecessary care.

•     The federal government will exert increasing pressure on providers to hold down Medicare and Medicaid costs.

•     There will be at least four levels of care, as determined by a patient's financial resources.

•     Physicians will find themselves in conflicting roles as advocates of patients and employees of cost conscious provider organizations.

This increasingly competitive and profit-driven environment will have an enormous effect on the way that limited health care

resources are allocated-who is cared for, and what kind of care they receive. Increased competition among providers can encourage the elimination of inefficiencies, but competition cannot control the pressure on costs imposed by an ever-expanding arsenal of new technology. Competition can force a hospital to offer a lower-than-average price to a valued buyer such as a large HMO, but some other payer has to make up the shortfall in order for the hospital to avoid fiscal disaster. Once increased competition squeezes out any remaining inefficiencies in the system, it can produce further savings only when competing providers begin to impose serious restrictions on the availability and quality of care offered.