| The past two decades have witnessed rapid growth in America's health care spending and the failure of a large number of policies attempting to contain this growth. Although numerous public policies aiming at curbing health care expenditures have been implemented by governments at various levels, most of these policies were formulated to address only parts of the health care system, rather than to reform the entire system. These various policies, taken as a whole, have not been successful in diverting the exponential growth patterns of health care expenditures.;This dissertation examines how economic incentives embedded in the health care finance system influence the behavior of system actors in determining health care utilization and price, and eventually health care spending. A structurally-oriented system dynamics simulation model is developed to be used as a policy analysis tool to evaluate the performance of alternative health financing policy approaches in a simulated environment. The model is a descriptive, generic system model that includes a multitude of factors interacting in an insurance-based health care finance system. The model serves as a single analytic framework that not only integrates multiple aspects of system structure, but also allows analysis of overall behavior from a system-wide perspective.;A series of generic health care financing policies are formulated and simulated using this model. These policies include: (1) patient cost sharing, (2) public insurance fee schedule, (3) all-payer fee schedule, (4) public insurance prospective payment, (5) public insurance capitation, (6) universal insurance with fee schedule, and (7) universal insurance with capitation. In addition, several scenario tests (for example, cost shifting tests) are also included.;Structural and simulation analyses suggest that underlying the health care finance system is a set of multiple feedback mechanisms which interact with methods of financing to drive up health expenditures. Cost-containment policies which place only partial controls over the system allow intra- and inter-sectoral compensating behaviors to undermine policy effectiveness. Furthermore, the simulation results also indicate that policy designs that combine universal insurance with system-wide payment rate control can contain health care spending, while provide coverage for the entire population. |
