Comments on H.R. 850

B-202458: Published: May 8, 1981. Publicly Released: May 8, 1981.

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GAO was asked to comment on a bill which proposed to implement a competitive system of health care delivery and financing by repealing all Federal health system regulatory programs. The bill proposes major structural reforms to initiate a competitive system based on individual choice under which each person is permitted to select the method of health care delivery which he believes is most appropriate for himself and his family with Federal assistance as is necessary. The bill proposes a complex system whereby individuals are given the opportunity to choose from a variety of qualified plans based on their cost, quality, and method of delivering health care. The bill provides that any local or State law that prevents or impedes the proposed system is preempted. GAO has provided comments on the Administration's proposed budget changes to phase out the Professional Standards Review Organizations (PSRO), health planning, and health maintenance organization programs. With the exception of the PSRO part of the proposal, GAO has been supportive of the proposals. The proposed complex system of providing and financing health care represents a significant departure from the existing system. Because of the broad implications of the proposal and the lack of any known experience with the proposed competitive system, GAO plans to examine the proposal and other bills which propose significant changes to the health care system.

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