Developing the Health Care Market

TLDR

Health‑care systems differ widely across countries, making outcome monitoring and policy design difficult due to poor data and perverse incentives, as illustrated by the UK’s National Health Service. The article examines and evaluates reforms aimed at creating quasi‑markets in health care, outlining market characteristics, system objectives, and the transition toward market‑based provision. Reforms have expanded quasi‑market roles, formalising buyer‑seller relationships to increase contestability in health‑care provision.

Abstract

The structure of health care services varies enormously from country to country and the responses of policy makers to these difficulties exhibit similar characteristics. There are a number of features of health care systems which make monitoring outcomes and policy formulation especially problematic poor data on outcomes and perverse incentives facing agents are good examples. In the UK, resource allocation has been effected within the National Health System, a public health care system par excellence. Recently, however a number of reforms have been effected which have increased the role of quasi markets there has been an attempt to enhance market contestability in health care provision by formalising relationships between buyers and sellers. This article investigates and evaluates the reforms which have occurred. Section 2 examines the characteristics of the health care market and Section 3 identifies the objectives of the health care system. Section 4 discusses the attempts to create a health care market and Section 5 ends with some concluding comments.