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A discussion of proposals for more price competition in medical services delivery. The advocates of competition argue that competition among organized systems will lead to efficient production of medical services and may lower resources devoted to medical care, as would be appropriate if there were a good bit of flat-of-the-curve medicine. Adverse consequences for low income groups can be averted by giving everyone a voucher whose value might fall as income increases. The author discusses many of the pitfalls to such a scheme and gives arguments both for and against it. Finally, he suggests that the concept of variable cost insurance should be given a try. If demonstrations of competitive arrangement are to be encouraged, this seems like a promising candidate.

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