By contrast, the new reform models require purchasers-government-appointed authorities, private insurers, or risk-bearing groups of health providers-to proactively manage and allocate resources amongst different health care needs. Purchasers are expected to manage treatment decision-making by physicians and other health providers. Managed competition and traditional single structured management combine elements of both government planning and market approaches. Managed care, another concept that is often referred to in the context of health care reform, is the mechanism through which managed competition proposals seek to obtain cost savings, but as described further below, can be employed in any health care system. The internal market programme has been surprisingly successful. The large majority of the measures of which the programme was made up have been adopted in time. Admittedly, there are areas which lag behind (such as free movement of persons). Moreover, it has not always been possible to maintain the rigorous approach originally and a lot remains to be done with regard to implementing the adopted measures at national level. Nevertheless, the essence of the internal market is in place, which finds perhaps its most spectacular expression in the complete abolition of controls on the movement of goods. From an economic point of view, the question whether there is an external dimension to the internal market sounds almost ridiculous. How could, an economist would argue, a policy of economic integration that is as encompassing as the internal market programme and that applies to twelve developed countries which play an important role in international trade not affect trade and economic relations with the outside world However, from the point of view of law-and policy-making the question could be raised in the early stages, as indeed it has been. One can safely say that until 1988 the attitude of the Community's institutions towards both the external effects of the internal market programme and the relationship between the programme and the Community's external policies was one of benign neglect. Before describing the competition-oriented reform models, a preliminary question must be addressed: why is health care reform needed A number of factors have converged creating strong pressures for health care reform in developed countries. These factors include:
concerns over increases in total spending on health care services;
concerns over rapidly increasing government spending;
access and rationing concerns; and
concerns over the cost-effectiveness and, indeed, effectiveness of many services supplied.
Let us look more closely at the forces contributing to reform throughout the 1980s and 1990s, beginning first with the concern over growth in total health care spending. Throughout the 1970s there were significant increases in the proportion of gross domestic product (GDP) (the total value of all goods and services produced by a country) absorbed by health care spending. Between 1972 and 1982 there was a 36-percent, 30-percent, 26-percent and 25-percent increase, respectively, in the percentage of GDP spent on