Wisconsin’s health care plan is in drastic need of improvement
Health care problems — including limited access, increasing costs, and increasing utilization — loom large in Wisconsin and across the nation. Several states, notably Massachusetts, are experimenting with new health care policies. Wisconsin is not an exception. In June 2005, two Wisconsin legislators unveiled a new plan to address these issues in Wisconsin. It is called the Wisconsin Health Plan (WHP).
The market for health care is complex. It is marked by some peculiarities in demand and supply. On the demand side, for example, we find price inelasticity and third-party payers. On the supply side, we find barriers to entry for health care providers and high technology prices. Because of the peculiarities, the health care sector operates as an imperfect market. But the fundamental problem in health care is not the operation of an imperfect market system; it is the lack of a vibrant free-market system. Over time, reliance on third-party payment for health care costs has eroded the incentive for consumers and providers to economize.