A voucher plan for financing health care delivery

Abstract There seems to be a growing consensus in this country that everyone should have guaranteed access to at least a minimum level of preventive and curative medical care. The real controversy is over the method by which such care would be assured. I have proposed elsewhere that each individual be given a voucher; ‘good’ for either full premium payment for membership in a comprehensive prepaid health plan in a specified period, or for a predetermined amount toward one's health insurance premium if it is desired to maintain consumption of care in a fee-for-service (ffs) mode. The purpose of the present paper will be to provide a preliminary examination of some of the operational characteristics of such a voucher which may be implemented on an ‘area’ basis, such an area containing some number of somehow identifiable ‘regions’. In each of the regions a governing board would make management decisions taking into account its peculiarities and needs. The regional board would then be responsible to some area Health Council. This, of course, parallels the kinds of decision-making bodies specified both in national proposals such as Senator Kennedy's, and statewide plans such as California Senate Bill 770 proposed by Senator Moscone (D., San Francisco). An analytical model of the decision process of such regional boards and Health Councils is developed and the optimal selection of voucher redemption levels and capital subsidy programs is characterized.