2
Competition versus Regulation
in American Health Policy
Evan M. Melhado
1，1 the history of federal health policy in the United States， the 1970s
appear to mark a major turning point. The decade opened with wide-
spread cries of\"crisis\" in American health care delivery and with a twofold
agenda of reform: snbjecting the delivery of health services to intensified
planning and regulation and entitling the entire population of the coun-
try to comprehensive health benefits under a system of national heahh in-
surance (NHI). As the decade ended， that reform agenda stood in disarray.
Instead， the leading themes among tormulators of American health poli-
cy were competition and market strengthening， dismantling of regulatory
apparatus， and acquiescence in a lesser conception of entitlement. This
study， a preliminary attempt to characterize and explain this shift， briefly
summarizes methods， assumptions， and main themes and then develops its
points in detail.
METHODS， PRESUPPOSITIONS， AND
MAIN LINES OF THE ARGUMENT
The approach taken here presents the shift as an episode in the intellec-
tual history of pnlicy formulation (cf. Fox 1979). The focus is less on
detailed policy prescriptions than on their underlying， fundamental prin-
ciples. These princit)les are exhibited through characterizing the ideas
shared by exponents of each of the valious policy positions (although the
difli:rences among advocates of any given position are necessarily under-
stated). The characterizations are not used to assess or judge the relative
merits or viability of either the fundamental ideas or the particular
proposals derived fiom them; instead， they serve as the refl:rence points
for an analysis of policy shift. The analysis attempts to identify a novel
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