Health planning for deregulation: implementing the 1979 amendments.

Its time was slow in coming, but the idea of deregulation of the health services industry must now be taken seriously. Although the option of letting market forces allocate resources to and within the health care industry has had academic support in the health policy debate for at least ten years,1 until very recently in policy circles there was a near consensus that the fundamental choice to rely primarily on regulation had already been made. 2 The only issues recognized on the policy agenda involved how to make existing regulatory institutions work better and how best to extend regulation's grip. But the year 1979 changed all that, as the 96th Congress sharply reversed the trend toward tighter regulatory controls. Not only did Congress reject the Carter Administration's heavy-handed proposal for hospital cost containment, but it also significantly reduced the jurisdiction and revised the mandate of state and local health planning and regulatory agencies under the National Health Planning and Resources Development Act of 1974." Competition and consumer preferences were thus reintroduced as viable candidates for a major role in disciplining the health care sector. This articleconcerns the implementation of Public Law 96-79, the National Health Planning and Resources Development Amendments of 1979. The thesis is that these amendments, properly understood, make substantial deregulation of the health services industry a realistic future possibility. After a brief statement of the nature and purposes of health planning and related regulation, the article sketches the recent policy developments that led Congress in 1979 to give the original health planning law a new, deregulatory thrust. After a short exposition of the