For more than two decades folks who are right of center have been split over the issue of managed competition. Now the issue seems to be coming to the forefront again.
Managed competition is the concept behind the ObamaCare exchanges, the RomneyCare exchange, the federal employee health benefits program, and the health systems of such countries as Switzerland, Norway and Israel.
The ObamaCare exchanges are the worst example of it. But that’s because the ObamaCare exchanges are the purest example. All these systems create perverse incentives on both sides of the market. But elsewhere, regulators try to restrain the worst outcomes. ObamaCare, by contrast, puts perverse incentives in place, opens the barn door, and lets happen whatever happens.
I am probably the most outspoken critic of this approach. At the risk of unduly repeating what I have been saying for 20 some years, here is my testimony last week on this issue and here is my WSJ editorial on it.