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2. Also, in societies such as those found in the United States and the United Kingdom, curative services are the commonest form of medical care services. An alternative and less costly alternative would be preventive healthcare services. For an overview of the issues, U.S. Department of Health and Human Services. Health U.S. and Healthy People 2000. 1992.

3. In defining such properties I am not denying the association between the distribution of disease and the social factors that give rise to variations in disease patterns between and within groups. See, Mechanic, D. Medical Sociology. New York: Free Press, 1978.Google Scholar

4. Measures aimed at redistributing income among groups to enhance their purchasing power may be viewed as both a preventive and a curative policy. The need to increase purchasing power, as in the American system, offers individuals access to services they would not otherwise have access to. Such equity issues, although important, are not as pervasive in the British system. However, as more market-based approaches are implemented for that system, issues of equity in allocation are of growing concern. For an overview of the issues involved see, Le Grand, J. Equity and Choice: An Essay in Economics and Applied Philosophy. New York: Harper Collins Academic, 1991.Google Scholar

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6. Consider a state of the world to be a function of several exogenous determinants, such as the outbreak of a contagious disease. Therefore, absent any uncertainty a consumer would know each state with precision.

7. In fact, it was in response to this income effect that the health insurance movement of 1913 to 1918 flourished. While this movement was also fueled by changes in the organization of medical care services, such income effects did play a significant role. Sevens, R. American Medicine and the Public Interest. New Haven: Yale University Press, 1971.Google Scholar

8. Alternative views on the development of medical insurance can be found in Starr, P. The Social Transformation of American Medicine. New York: Basic Books, 1982.Google Scholar

9. This is precisely the type of pricing mechanism that has been established under the Resource Based Relative Value Scale (RBRVS) system for Medicare Part B. See, Hsiao, W. et al. An overview of the development and refinement of the resource-based relative value scale—the foundation for reform of United States physician payment. Medical Care 1992;30:373–7.CrossRefGoogle ScholarPubMed

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11. One cannot treat a disease without first establishing an effective protocol. Circumstances in which a protocol has yet to be established are experimental. Hence, the patient is not paying for disease eradication; instead, she is paying for protocol establishment. Several categories of chemotherapy represent examples of outcome pricing.

12. An example would be the establishment of practice guidelines and practice parameters. This serves to inform physicians of established protocols for treating particular maladies, Young, et al. , 1996 Medical Outcomes & Guidelines Sourcebook: A Progress Report and Resource Guide on Medical Outcomes Research and Practice Guidelines, Developments, Data and Documentary. New York: Faulkner and Gray, 1995.Google Scholar

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19. The introduction of other information technologies into the market, such as electronic mail and video conferencing, are considered here to be different designs.

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21. Issues and conflicts that rise during this stage of design are frequently discussed in the work of Callahan, D. Setting Limits: Medical Goals in an Aging Society. New York: Simon and Shuster, 1987.Google Scholar

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23. The United States has consistently expressed an unwillingness to redistribute income to finance healthcare services for the 40 million uninsured. See, Starr, P. The Logic of Health Care Reform. Knoxville: Whittle Direct Books, 1992.Google Scholar

24. Flat-fee reimbursement occurs when a provider is paid a prenegotiated amount for treating a given malady. Conversely, capitated reimbursement methods occur when providers are paid beforehand to provide an array of services for a fixed rate.

25. Explicit schemes such as Oregon's system of allocating services to Medicaid patients is an example. Kizhaber, J. Prioritizing health services in an era of limits: The Oregon experience. British Medical Journal 1993;307:373–7.CrossRefGoogle Scholar

26. Other devises are utilization review instruments, of which there are three types: (1) prospective, (2) retrospective, and (3) concurrent. See, Scheffler, et al. The impact of blue cross and blue shield plan utilization management programs. Inquiry 1991;28:263–75.Google ScholarPubMed

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29. For an overview of the political organization of the NHS. See, Klein, R. The Politics of the NHS. New York: Longman Inc., 1989.Google ScholarPubMed

30. The 1990 reforms were based upon ideas espoused in the 1989 Working for Patients White Paper. Department of Health, Working for patients, Cm. 555. London: HMSO, 1989.Google Scholar

31. NHS trusts are hospitals and other units that have boards of directors. The board consists of a nonexecutive chairman, appointed by the secretary of state, up to five nonexecutive directors, of which two are appointed by the Regional Health Authority, and an equal number of executive directors. The maximum number of executive directors is five, including the chief executive and director of finance. Health Care Financing Management Association (HCFMA), Introductory Guide to NHS Finance in UK. London: The Health Care Financing Management Association, 1993.Google Scholar

32. The organizational structure of NHS trusts are quite similar to public acute care hospitals in the United States. See, Gage, L. America's Safety Net: A Report on the Situation of Public Hospitals in Our Nation's Metropolitan Areas. Washington, D.C.: National Association of Public Hospitals, 1987.Google Scholar

33. General practitioner fundholders are physician groups who are both purchasers and providers of services. Passage of the 1990 Act allowed physician groups, of a certain size, direct budgetary allocations from the Regional Health Authority. Such groups are allowed to purchase, for their registered patient populations, a limited amount of outpatient and inpatient hospital services, as well as other physician (consultant, specialist) and pharmaceutical services. Family health service authorities, however, are responsible for reimbursing providers of services for fundholder patients. In other words, fundholders do not see the monies from the RHA. The funds allocated are subtracted from the overall allocations that may have been made to the district health authority. Furthemore, each region's population is “weighted” to reflect the demands placed upon healthcare services by different age groups. These “weighted capitated” rates are based upon the estimated expenditures per head for various demographic categories. However, regional health authorities have some discretion in determining their own subregional allocation formulas for district health authorities. See note 31. Health Care Financing Management Association. 1993.

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