They are free market competition and government regulation. Each approach offers different costs and benefits, and there is much disagreement among experts as to exactly what those costs and benefits are. The Case for Government Regulation Government regulation is the preferred method by many people and is the dominant market perspective today. In part due to the public's perception of healthcare as a right rather than a privilege, access to healthcare became a priority of the federal government in the early sixties. Medicaid and Medicare programs were implemented at that time and together these programs increased access to healthcare for the elderly and the poor, the two groups that had the least access to the system.
Government regulation can compensate for the flaws in the system and improve market performance.
These flaws include a lack of information by the consumer, dissociation between healthcare consumers and payers, and lack of equity in access. The healthcare market is fundamentally different from other economic institutions. The two primary differences are that the physician is both the provider of healthcare services and the consultant who decides what a patient needs for healthcare, and the dissociation of payer and consumer. Physicians not only influence the cost of individual treatment but also the services and assets of local hospitals, often without regard to cost. Third party payers insulate the patient from the cost of healthcare.