Political economy studies of health policy offer more than simple economic or political studies. Politics can have a greater influence on health policy decisions and their implementation than either economic or health considerations. Politics constrain how much of an optimal economic or health programme can be adopted and implemented. At the same time, the economic interests of the stakeholders drive their political positions on any potential policy change. We need more political economy studies to understand how to craft and execute politically viable ‘best’ health policies. This editorial uses the decision choices facing China’s health reform to illustrate the importance of political economic analysis and argues for more integrated political economy studies, particularly ones examining the roles of the health bureaucracy and the medical profession.

This article is a comparative study of three Scandinavian countries – Norway, Denmark, and Sweden – all of which have provided the individual patient with extensive rights to choose the hospital where he/she wishes to receive treatment. In the paper, we present an analysis of the utilization of the opportunity to choose between hospitals in these three countries. The analysis addresses two questions: (i) How many patients are exercising the right to choose between hospitals in these countries and who is making use of this opportunity? (ii) How can we explain the observed utilization pattern? The results of the study reveal clear similarities between the three countries and suggest that few patients have actually chosen their hospital. However, a gradual increase can be observed over the years. Few formal, legislative, or economic barriers exist for patients. Instead, limited knowledge amongst patients regarding reforms, combined with insufficient support from GPs and limited information, can explain why few patients choose to receive care outside of their local region.

Industrialised countries face similar challenges for improving the performance of their health system. Nevertheless, the nature and intensity of the reforms required are largely determined by each country’s basic social security model. Most reforms in Beveridge-type systems have sought to increase choice and reduce waiting times while those in major Bismarck-type systems have focused on cost control by constraining the choice of providers. This paper looks at the main differences in performance of five countries and reviews their recent reform experience, focusing on three questions: Are there systematic differences in performance of Beveridge and Bismarck-type systems? What are the key parameters of healthcare system, which underlie these differences? Have recent reforms been effective?

Our results do not suggest that one system-type performs consistently better than the other. In part, this may be explained by the heterogeneity in organisational design and governance both within and across these systems. Insufficient attention to those structural differences may explain the limited success of a number of recent reforms. Thus, while countries may share similar problems in terms of improving healthcare performance, adopting a ‘copy-and-paste’ approach to healthcare reform is likely to be ineffective.

Since 1995, the Veterans Health Administration (VHA) has had an ongoing process of systems improvement that has led to dramatic improvement in the quality of care delivered. A major component of the redesign of the VHA has been the creation of a fully developed enterprise-wide Electronic Health Record (EHR). VHA’s Health Information Technology was developed in a collaborative fashion between local clinical champions and central software engineers. Successful national EHR implementation was achieved by 1999, since when the VHA has been able to increase its productivity by nearly 6 per cent per year.

The implementation of choice for patients over where and when they are seen by specialists in hospital outpatient clinics has been supported by electronic referral systems in England and the Netherlands. This paper compares the implementation of ‘Choose and Book’ in England and ‘ZorgDomein’ in a region of the Netherlands. For England the analysis draws on national data and published studies on ‘Choose and Book’, national patient surveys, and qualitative data based on general practitioner (GP) focus groups. For the Netherlands the analysis draws on qualitative data collected during observational study as well as survey data among patients, GPs and medical specialists. We find that despite significant differences in the genesis and design of the policy, similar challenges have been faced. The electronic referral systems have forced changes to the process of care at the interface between primary and secondary care and standardisation between practices. Although these changes have the potential to generate improvements and benefits, for example, convenience, certainty and choice for patients and efficiency gains through for example reduced do not attend rates, repeat consultations and duplicative diagnostic tests; they have also generated problems during implementation including GP resistance. Policy ambitions for patient choice may not be realised if the implementation of the booking system is not carefully designed and evaluated.

In introducing this Special Issue on Social Capital and Health, this article tracks the popularization of the term ‘social capital’ and sheds light on the controversy surrounding the term and its definitions. It sets out four mechanisms that link social capital with health: making information available to community members, impacting social norms, enhancing the health care services and their accessibility in a community, and offering psychosocial support networks. Approaches to the measurement of social capital include the Social Capital Community Benchmark Survey (SCCBS) developed by Robert Putnam, and the Petris Social Capital Index (PSCI), which looks at community voluntary organizations using public data available for the entire United States. The article defines community social capital (CSC) as the extent and density of trust, cooperation, and associational links and activity within a given population. Four articles on CSC are introduced in two categories: those that address behaviors – particularly utilization of health services and use of tobacco, alcohol, and drugs; and those that look at links between social capital and physical or mental health. Policy implications include: funding and/or tax subsidies that would support the creation of social capital; laws and regulations; and generation of enthusiasm among communities and leaders to develop social capital. The next steps in the research programme are to continue testing the mechanisms; to look for natural experiments; and to find better public policies to foster social capital.

This study aims to present an overview of the evolutionary policy process in reforming the health care system in Taiwan, through dissecting the forces of knowledge, social-cultural context, economic resources and political system. We further identify factors, which had a significant impact on health care reform policies in Taiwan through illustrative policy examples. One of the most illuminating examples highlighted is the design and implementation of a single-payer National Health Insurance (NHI) program in 1995, after nearly five years of planning efforts (1988–1993) and a two-year legislative marathon. The NHI is one of the most popular social programs ever undertaken in the history of Taiwan, which greatly enhances financial protection against unexpected medical expenses and assures access to health services. Nonetheless, health care reform still has an unfinished agenda. Despite high satisfaction ratings, Taiwan’s health care system today is encountering mounting pressure for new reforms as a result of its rapidly aging population, economic stagnation, and imbalanced NHI checkbook. Although there may exist some heterogeneous system characteristics and challenges among different health care systems around the world, Taiwan’s experiences in reforming its health care system for the past few decades may provide valuable lessons for countries going through rapid economic and political transition.

On 31st January 2020, the Italian cabinet declared a 6-month national emergency after the detection of the first two COVID-19 positive cases in Rome, two Chinese tourists travelling from Wuhan. Between then and the total lockdown introduced on 22nd March 2020 Italy was hit by an unprecedented crisis. In addition to being the first European country to be heavily swept by the COVID-19 pandemic, Italy was the first to introduce stringent lockdown measures. The SARS-CoV-2 outbreak and related COVID-19 pandemic have been the worst public health challenge endured in recent history by Italy. Two months since the beginning of the first wave, the estimated excess deaths in Lombardy, the hardest hit region in the country, reached a peak of more than 23,000 deaths. The extraordinary pressures exerted on the Italian Servizio Sanitario Nazionale (SSN) inevitably leads to questions about its preparedness and the appropriateness and effectiveness of responses implemented at both national and regional levels. The aim of the paper is to critically review the Italian response to the COVID-19 crisis spanning from the first early acute phases of the emergency (March–May 2020) to the relative stability of the epidemiological situation just before the second outbreak in October 2020.

Although decentralization has been widely implemented in health systems, there is little agreement as to how it should be defined or the outcomes it should produce. This article develops a functional typology based on political, administrative, and fiscal dimensions of decentralization. It utilizes these three categories to identify and highlight key theoretical issues concerning decentralization, emphasizing the likely advantages and disadvantages that decentralization can be expected to generate. It then examines the usefulness of this functional framework in explaining recent policy-making decisions within a number of tax-based health systems in Western Europe. The article concludes by suggesting that this three-part typology can be helpful to both policy makers and academics in evaluating the effectiveness of decentralization as a policy mechanism within health care systems.

This paper compares the introduction of policies to promote or strengthen patient choice in four Northern European countries – Denmark, England, the Netherlands and Sweden. The paper examines whether there has been convergence in choice policies across Northern Europe. Following Christopher Pollitt's suggestion, the paper distinguishes between rhetorical (discursive) convergence, decision (design) convergence and implementation (operational) convergence (Pollitt, 2002). This leads to the following research question for the article: Is the introduction of policies to strengthen choice in the four countries characterised by discursive, decision and operational convergence? The paper concludes that there seems to be convergence among these four countries in the overall policy rhetoric about the objectives associated with patient choice, embracing both concepts of empowerment (the intrinsic value) and market competition (the instrumental value). It appears that the institutional context and policy concerns such as waiting times have been important in affecting the timing of the introduction of choice policies and implementation, but less so in the design of choice policies. An analysis of the impact of choice policies is beyond the scope of this paper, but it is concluded that further research should investigate how the institutional context and timing of implementation affect differences in how the choice policy works out in practice.

In 2007, a new wave of local reforms involving choice for the population and privatisation of providers was initiated in Swedish primary care. Important objectives behind reforms were to strengthen the role of primary care and to improve performance in terms of access and responsiveness. The purpose of this article was to compare the characteristics of the new models and to discuss changes in financial incentives for providers and challenges regarding governance from the part of county councils. A majority of the models being introduced across the 21 county councils can best be described as innovative combinations between a comprehensive responsibility for providers and significant degrees of freedom regarding choice for the population. Key financial characteristics of fixed payment and comprehensive financial responsibility for providers may create financial incentives to under-provide care. Informed choices by the population, in combination with reasonably low barriers for providers to enter the primary care market, should theoretically counterbalance such incentives. To facilitate such competition is indeed a challenge, not only because of difficulties in implementing informed choices but also because the new models favour large and/or horizontally integrated providers. To prevent monopolistic behaviour, county councils may have to accept more competition as well as more governance over clinical practice than initially intended.

This study revisits the debate on the ‘red herring’, i.e. the claim that population aging will not have a significant impact on health care expenditure (HCE), using a Finnish data set. We decompose HCE into several components and include both survivors and deceased individuals into the analyses. We also compare the predictions of health expenditure based on a model that takes into account the proximity to death with the predictions of a naïve model, which includes only age and gender and their interactions. We extend our analysis to include income as an explanatory variable. According to our results, total expenditure on health care and care of elderly people increases with age but the relationship is not as clear as is usually assumed when a naïve model is used in health expenditure projections. Among individuals not in long-term care, we found a clear positive relationship between expenditure and age only for health centre and psychiatric inpatient care. In somatic care and prescribed drugs, the expenditure clearly decreased with age among deceased individuals. Our results emphasize that even in the future, health care expenditure might be driven more by changes in the propensity to move into long-term care and medical technology than age and gender alone, as often claimed in public discussion. We do not find any strong positive associations between income and expenditure for most non-LTC categories of health care utilization. Income was positively related to expenditure on prescribed medicines, in which cost-sharing between the state and the individual is relatively high. Overall, our results indicate that the future expenditure is more likely to be determined by health policy actions than inevitable trends in the demographic composition of the population.

The English National Health Service is introducing activity based tariff systems or Payment by Results (PbR) as the basis for hospital funding. The funding arrangements provide incentives for increasing activity, particularly day surgery, and, uniquely, are based on costing data from all hospitals. But prices should not be based on average costs and the potential of PbR to improve the quality of care is yet to be exploited. Without refinement, PbR threatens to undermine expenditure control, to divert resources away from primary care, and to distort needs based funding.

There has been substantial consolidation among health insurers and hospitals, recently, raising questions about the effects of this consolidation on the exercise of market power. We analyze the relationship between insurer and hospital market concentration and the prices of hospital services. We use a national US dataset containing transaction prices for health care services for over 11 million privately insured Americans. Using three years of panel data, we estimate how insurer and hospital market concentration are related to hospital prices, while controlling for unobserved market effects. We find that increases in insurance market concentration are significantly associated with decreases in hospital prices, whereas increases in hospital concentration are non-significantly associated with increases in prices. A hypothetical merger between two of five equally sized insurers is estimated to decrease hospital prices by 6.7%.

This paper examines relationships between aging, social capital, and healthcare utilization. Cross-sectional data from the 2001 Canadian Community Health Survey and the Canadian Census are used to estimate a two-part model for both GP physicians (visits) and hospitalization (annual nights) focusing on the impact of community- (CSC) and individual-level social capital (ISC). Quantile regressions were also performed for GP visits. CSC is measured using the Petris Social Capital Index (PSCI) based on employment levels in religious and community-based organizations [NAICS 813XX] and ISC is based on self-reported connectedness to community. A higher CSC/lower ISC is associated with a lower propensity for GP visits/higher propensity for hospital utilization among seniors. The part-two (intensity model) results indicated that a one standard deviation increase (0.13%) in the PSCI index leads to an overall 5% decrease in GP visits and an annual offset in Canada of approximately $225 M. The ISC impact was smaller; however, neither measure was significant in the hospital intensity models. ISC mainly impacted the lower quantiles in which there was a positive association with GP utilization, while the impact of CSC was strongest in the middle quantiles. Each form of social capital likely operates through a different mechanism: ISC perhaps serves an enabling role by improving access (e.g. transportation services), while CSC serves to obviate some physician visits that may involve counseling/caring services most important to seniors. Policy implications of these results are discussed herein.

Adam Smith, The Theory of Moral Sentiments, Chapter 1, Part first.

This paper explores what motivates improved health care performance. Previously, many have thought that performance would either improve via choice and competition or by relying on trust and altruism. But neither assumption is supported by available evidence. So instead we explore a third approach of reciprocal altruism with sanctions for unacceptably poor performance and rewards for high performance. These rewards and sanctions, however, are not monetary, but in the form of reputational effects through public reporting of benchmarking of performance. Drawing on natural experiments in Italy and the United Kingdom, we illustrate how public benchmarking can improve poor performance at the national level through ‘naming and shaming’ and enhance good performance at the sub-national level through ‘competitive benchmarking’ and peer learning. Ethnographic research in Zambia also showed how reputations count. Policy-makers could use these effects in different ways to improve public services.

Although choice may be seen as an end in itself, the papers included in this special issue of Health Economics, Policy and Law, examine choice policies in European systems of health care, which aim to be effective instruments for ameliorating the systemic pressures from the iron triangle of equity, efficiency, and cost. Three papers consider the nature of differences between and within countries following the Beveridge and Bismarck models of financing and organising the delivery of care, and how choices are changing within different systems. Within countries following the Beveridge model, current policies in England, Denmark and Sweden emphasise increasing patient choice of provider. Within countries following the Bismarck model, current policies in France and Germany seek to restrict choice of specialists by introducing ‘soft’ gatekeeping; and in the Netherlands there is a system of managed competition with choice of insurer that, in principle, allows insurers to contract selectively with providers. A fourth paper considers how government policies that seek to restrict choice within systems of universal coverage have been subject to challenges in the courts. A commentary explores the implications of the fraught and complex nature of choices between insurers and providers of health care for designing effective choice policies.

This paper investigates the determinants of the prices of branded prescription medicines across different regulatory settings and health care systems, taking into account their launch date, patent status, market dynamics and the regulatory context in which they diffuse. By using volume-weighted price indices, this paper analyzes price levels for a basket of prescription medicines and their differences in 15 OECD countries, including the United States and key European countries, the impact of distribution margins and generic entry on public prices and to what extent innovation, by means of introducing newer classes of medicines, contributes to price formation across countries. In doing so, the paper seeks to understand the factors that contribute to the existing differences in prices across countries, whether at an ex-factory or a retail level. The evidence shows that retail prices for branded prescription medicines in the United States are higher than those in key European and other OECD countries, but not as high as widely thought. Large differences in prices are mainly observed at an ex-factory level, but these are not the prices that consumers and payers pay. Cross-country differences in retail prices are actually not as high as expected and, when controlling for exchange rates, these differences can be even smaller. Product age has a significant effect on prices in all settings after having controlled for other factors. Price convergence is observed across countries for newer prescription medicines compared with older medicines. There is no evidence that originator brand prices fall after generic entry in the United States, a phenomenon known as the ‘generics paradox’. Finally, distribution and taxes are important determinants of retail prices in several of the study countries. To the extent that remuneration of the distribution chain and taxation are directly and proportionately linked to product prices this is likely to persist over time.

In January 2017, the UK Government made public a Memorandum of Understanding (MoU) between the Department of Health, National Health Service (NHS) Digital and the Home Office. This Memorandum allows for the more expedited sharing of a patient’s non-clinical data, specifically from the NHS England to the Home Office. The Government justified the MoU as in the ‘public interest to support effective immigration enforcement’. In this review, we seek to unpack this justification by providing, first, a background to the MoU, placing it in the context of creating a ‘hostile environment’ for migrants – a project initially sought by Theresa May in her time as Home Secretary. We then explore the potential impact of data sharing on individual health, public health and on health professionals. We conclude that the MoU could threaten both individual and public health, while placing health professionals in an unworkable position both practically and in terms of their duties to patients around confidentiality. As such, we agree with colleagues’ position that it should be suspended, at least until a full consultation and health impact assessment can be carried out.

Policy debate about funding criteria for drugs used to treat rare, orphan diseases is gaining prominence. This study presents evidence from a discrete choice experiment using a convenience sample of university students to investigate individual preferences regarding public funding for drugs used to treat rare diseases and common diseases. This pilot study finds that: other things equal, the respondents do not prefer to have the government spend more for drugs used to treat rare diseases; that respondents are not willing to pay more per life year gained for a rare disease than a common disease; and that respondents weigh relevant attributes of the coverage decisions (e.g. costs, disease severity and treatment effectiveness) similarly for both rare and common diseases. The results confirm the importance of severity and treatment effectiveness in preferences for public funding. Although this is the first study of its kind, the results send a cautionary message regarding the special treatment of orphan drugs in coverage decision-making.