This study analyses the role of the payment vehicle when conducting non-market valuations of health care services using stated preference methods. Based on a contingent valuation study conducted in Denmark encompassing more than 3400 respondents three important conclusions are drawn. Firstly, it is found that the valuation of a publicly financed ambulance helicopter service is higher than for an identical privately financed service. Secondly, the results suggest that the public premium is likely to be partly driven by altruistic preferences, and that some citizens value access to this type of service for all. An important driver is also perceptions of quality of services across the private and public sector. Finally, it is shown that exclusion of protest bidders is problematic and may bias welfare estimates. The take home message is that it is difficult to isolate the value of a good per se, and that analysts should take care in applying the payment vehicle that is likely to be applied in real life when valuing non-market goods. There has been little awareness of the importance of choice of payment vehicle in the literature to date.

In many OECD countries, healthcare sectors have become increasingly concentrated as a result of mergers. However, detailed empirical insight into why healthcare providers merge is lacking. Also, we know little about the influence of national healthcare policies on mergers. We fill this gap in the literature by conducting a survey study on mergers among 848 Dutch healthcare executives, of which 35% responded (resulting in a study sample of 239 executives). A total of 65% of the respondents was involved in at least one merger between 2005 and 2012. During this period, Dutch healthcare providers faced a number of policy changes, including increasing competition, more pressure from purchasers, growing financial risks, de-institutionalisation of long-term care and decentralisation of healthcare services to municipalities. Our empirical study shows that healthcare providers predominantly merge to improve the provision of healthcare services and to strengthen their market position. Also efficiency and financial reasons are important drivers of merger activity in healthcare. We find that motives for merger are related to changes in health policies, in particular to the increasing pressure from competitors, insurers and municipalities.

The new round of health care reforms in China achieved significant initial results. New and emerging problems coinciding with the deepening of the reforms, however, require further institutional changes to strengthen the competition mechanism and promote public hospital efficiency. This paper provides a conceptual framework and preliminary assessment of public hospital competition in China. Specifically, we distinguish between two closely related concepts – competition and privatization, and identify several critical conditions under which hospital competition can be used as a policy instrument to improve health care delivery in China. We also investigate the current performance and identify several unintended consequences of public hospital competition – mainly, medical arms race, drug over-prescription and the erosion of a trusting relationship between patients and physicians. Finally, we discuss the policy options for enhancing the internal competition in China’s hospital market, and conclude that public investment on information provision is key to reaping the positive outcomes of pro-competition policies.

Equity in health care financing is recognised as a main goal in health policy. It implies that payments should be linked to capacity to pay and that households should be protected against catastrophic health expenditure (CHE). The risk of CHE is inversely related to the share of out-of-pocket payments (OOP) in total health expenditure. In Portugal, OOP represented 26% of total health expenditure in 2010 [one of the highest among Organisation for Economic Co-operation and Development (OECD) countries]. This study aims to identify the proportion of households with CHE in Portugal and the household factors associated with this outcome. Additionally, progressivity indices are calculated for OOP and private health insurance. Data were taken from the Portuguese Household Budget Survey 2010/2011. The prevalence of CHE is 2.1%, which is high for a developed country with a universal National Health Service. The main factor associated with CHE is the presence of at least one elderly person in households (when the risk quadruples). Payments are particularly regressive for medicines. Regarding the results by regions, the Kakwani index for total OOP is larger (negative) for the Centre and lower, not significant, for the Azores. Payments for voluntary health insurance are progressive.

In recent years China has witnessed a surge in medical disputes, including many widely reported violent riots, attacks, and protests in hospitals. This is the result of a confluence of inappropriate incentives in the health system, the consequent distorted behaviors of physicians, mounting social distrust of the medical profession, and institutional failures of the legal framework. The detrimental effects of the damaged doctor–patient relationship have begun to emerge, calling for rigorous study and serious policy intervention. Using a sequential exploratory design, this article seeks to explain medical disputes in Chinese public hospitals with primary data collected from Shenzhen City. The analysis finds that medical disputes of various forms are disturbingly widespread and reveals that inappropriate internal incentives in hospitals and the heavy workload of physicians undermine the quality of clinical encounters, which easily triggers disputes. Empirically, a heavy workload is associated with a larger number of disputes. A greater number of disputes are associated with higher-level hospitals, which can afford larger financial settlements. The resolution of disputes via the legal channel appears to be unpopular. This article argues that restoring a healthy doctor–patient relationship is no less important than other institutional aspects of health care reform.

In the past two decades, setting up independent health technology assessment (HTA) agencies has become a popular tool to inform reimbursement decision-making in health care, spreading from Northern European countries across Western Europe but much less so to post-communist countries. Structural political science explanations leave gaps in clarifying this diffusion pattern. This paper proposes a theoretical model focusing on the influence of domestic epistemic communities mitigating policy diffusion. Based on a review of HTA institutions in the EU, it proposes a chronological taxonomy of HTA agencies in Europe (the forerunners, the mainstreamers and the non-adopters) and asks why there is such an important East-West divide. The paper discusses theoretical explanations from different literatures, finding unsatisfactory many traditional political science answers such as the degree of centralization of a country’s health system, its financial organization (Bismarckian or Beveridgian), the attitude toward independent regulatory bodies in general, the influence of international actors, or lack of resources. Finally, it suggests cases for empirical testing of the domestic epistemic communities model.

The Italian Health care System provides universal coverage for comprehensive health services and is mainly financed through general taxation. Since the early 1990s, a strong decentralization policy has been adopted in Italy and the state has gradually ceded its jurisdiction to regional governments, of which there are twenty. These regions now have political, administrative, fiscal and organizational responsibility for the provision of health care. This paper examines the different governance models that the regions have adopted and investigates the performance evaluation systems (PESs) associated with them, focusing on the experience of a network of ten regional governments that share the same PES. The article draws on the wide range of governance models and PESs in order to design a natural experiment. Through an analysis of 14 indicators measured in 2007 and in 2012 for all the regions, the study examines how different performance evaluation models are associated with different health care performances and whether the network-shared PES has made any difference to the results achieved by the regions involved. The initial results support the idea that systematic benchmarking and public disclosure of data are powerful tools to guarantee the balanced and sustained improvement of the health care systems, but only if they are integrated with the regional governance mechanisms.

All consumer groups with specific preferences must feel free to easily switch insurer in order to discipline insurers to be responsive to consumers’ heterogeneous preferences. This paper provides insight into the switching behaviour of low-risks (i.e. young or healthy consumers) and high-risks (i.e. elderly or unhealthy consumers) in the Netherlands in the period 2009–2012. We analysed: (1) administrative data with objective health status information (i.e. medically diagnosed diseases and pharmaceutical use) and information on health care expenses of nearly the entire Dutch population (n=15.3 million individuals) and (2) three-year sample data (n=1152 individuals). Our findings indicate that switching rates strongly decrease with age. For example, in 2009, consumers aged 25–44 switched 10 times more than consumers aged 75 or older. Another finding is that switching rates decrease as the predicted health care expenses increase. Although healthy consumers switch twice as much as unhealthy consumers, this difference becomes much smaller after adjusting for age. We conclude that our findings can be explained by higher perceived switching costs by elderly consumers than by young consumers. Consequently, insurers have low incentives to act as quality-conscious purchasers of care for the elderly consumers. Therefore, strategies should be developed to increase the choice of insurer of elderly consumers.

In spite of the vast number of studies measuring economic efficiency in health care, there has been little take-up of this evidence by policy-makers to date. This study provides an illustration of how a system-level study drawing on best practice in empirical measurement of efficiency may be of practical use to health system decision makers and managers. We make use of the rich data available in Canada to undertake a robust two-stage data envelopment analysis to calculate efficiency at the regional (sub-provincial) level. Decisions about what the health system produces (the outcome to measure efficiency against) and what are the resources it has to produce that outcome were based on interviews and consultation with health system decision makers. Overall, we find large inefficiencies in the Canadian health care system, which could improve outcomes (here, measured as a reduction in treatable causes of death) by between 18 and 35% across our analyses. Also, we find that inefficiencies are the result of three main sets of factors that policy makers could pay attention to: management factors, such as hospital re-admissions; public health factors, such as obesity and smoking rates; and environmental factors such as the population’s average income.

Over-prescription has become one major problem in China’s health care sector. Incorporating interview data from hospitals in Shanghai, this paper provided empirical evidence on how the process of over-prescription was carried out in day-to-day clinical settings, and demonstrates various mechanisms that allow over-prescription to continue vigorously in the context of the Chinese health care system. In particular, this study identified four levels of incentives that over-prescription was carried out: hospital, medical department, doctors and pharmaceutical companies. Due to the insufficient funding from the government and rising operational costs, hospitals had to rely on the sales of drugs and provision of medical services to survive. This funding pressure then transferred to specific revenue targets for medical departments. A combination of incentives, including drug remunerations, bonus system, low pay and high workloads motivated over-prescription at doctor level. At pharmaceutical company level, high profits of pharmaceuticals products as well as lack of emphasis on efficacy of drugs led to under-table payments and illicit drug remunerations. The study argued that the way that the Chinese health care system operates was based on the profit-seeking principle rather than on fulfilling its social functions, and called for a systematic reform of provider incentives to eradicating the problem of over-prescription.

The market-oriented reform in the Dutch health care system is now in its 10th year. This article offers a concise overview of some of its effects thus far on health insurance, healthcare purchasing and healthcare provision. Furthermore, attention is given to its impact on healthcare expenditures, power and trust relationships as well as the relationship between the Minister of Health and the Dutch Healthcare Authority. The reform triggered various alterations in Dutch health care some occurring quickly (e.g. health insurance), others taking longer (e.g. purchasing). These developments suggest a process of gradual transformation. The reform has instigated controversy which is increasingly framed as a power conflict between insurers and providers. Weakened consumer trust in insurers threatens the legitimacy of the reform. The relationship between Minister and Healthcare Authority appears to be more intimate than the formal independent status of this regulatory agency would suggest.

While studies have shown that reductions in out-of-pocket payments for vaccination generally encourages vaccination uptake, research on the impact on health outcomes has rarely been examined. Thus, the present study, using municipal-level survey data on a subsidy programme for influenza vaccination in Japan that covers the entire country, examines how reductions in out-of-pocket payments for vaccination among non-elderly individuals through a subsidy programme affected regional-level influenza activity. We find that payment reductions are negatively correlated with the number of weeks with a high influenza alert in that region, although the correlation varied across years. At the same time, we find no significant correlation between payment reductions and the total duration of influenza outbreaks (i.e. periods with a moderate or high alert). Given that a greater number of weeks with a high alert indicates a severer epidemic, our findings suggest that reductions in out-of-pocket payments for influenza vaccination among the non-elderly had a positive impact on community-wide health outcomes, indicating that reduced out-of-pocket payments contributes to the effective control of severe influenza epidemics. This suggests that payment reductions could benefit not only individuals by providing them with better access to preventive care, as has been shown previously, but also communities as a whole by shortening the duration of epidemics.

The Finnish health care system is widely respected for its pilot role in creating primary-care-led health systems. In the early 1990s, however, a severe economic downturn in Finland reduced public funding and weakened the Finnish system’s deeply decentralized model of health care administration. Recent Bank of Finland projections forecasting several decades of slow economic growth, combined with the impact of an aging population, appear to make major reform of the existing public system inevitable. Over the last several years, political attention has focused mostly on administrative consolidation inside the public sector, particularly integration of health and social services. Current proposals call for a reformed health sector governance structure based on a new meso-level configuration of public administration. In addition, Finland’s national government has proposed replacing the current multi-channel public funding structure (which includes health insurance subsidies for occupational health services) with a single-channel public funding structure. This commentary examines several key issues involved in reforming the delivery structure of the Finnish health care system. It also explores possible alternative strategies to reform current funding arrangements. The article concludes with a brief discussion of implications from this Finnish experience for the wider health reform debate.

The passage of the Affordable Care Act in the United States has opened a policy window for the establishment of an independent Medicaid agency for the Navajo Nation. This article explores several policy options to improve health care services for Native Americans. Although there is a lack of scholarly research on the impact of healthcare reform and the effectiveness of current health care programs for American Indians, policymakers should utilize evidence-based research to inform policy decisions.

Innovation in the development of new drugs has to balance the needs of health actors and administrators, the pharmaceutical industry and patients. Differing perspectives on what constitutes an innovation, where research and development should be directed and how new drugs should be evaluated and priced cause ongoing tensions within the regulatory framework. In the current climate, where Europe’s health systems face rising demand for health services and increasingly restricted resources, the efficiency of pharmaceutical regulation and drug development is under even greater scrutiny. How can regulation foster innovation and industry growth while also serving the public health needs of society, and what is the EU’s role in pursuing this objective? Drawing on a provision which formerly existed in Norwegian pharmaceutical legislation, this article explores the potential of a medical need clause (MNC) in addressing these issues. In restricting market authorisations to those drugs that offer an added therapeutic value, might a MNC foster innovation and spending efficiency in Europe’s health systems?

We outline key conclusions of the World Health Organisation's report 'Making Fair Choices on the Path to Universal Health Coverage (UHC)'. The Report argues that three principles should inform choices on the path to UHC: I. Coverage should be based on need, with extra weight given to the needs of the worse off; II. One aim should be to generate the greatest total improvement in health; III. Contributions should be based on ability to pay and not need. We describe how these principles determine which trade-offs are (un)acceptable. We also discuss which institutions contribute to fair and accountable choices.

There is misunderstanding about both the meaning and the role of cost-effectiveness thresholds in policy decision making. This article dissects the main issues by use of a bookshelf metaphor. Its main conclusions are as follows: it must be possible to compare interventions in terms of their impact on a common measure of health; mere effectiveness is not a persuasive case for inclusion in public insurance plans; public health advocates need to address issues of relative effectiveness; a ‘first best’ benchmark or threshold ratio of health gain to expenditure identifies the least effective intervention that should be included in a public insurance plan; the reciprocal of this ratio – the ‘first best’ cost-effectiveness threshold – will rise or fall as the health budget rises or falls (ceteris paribus); setting thresholds too high or too low costs lives; failure to set any cost-effectiveness threshold at all also involves avertable deaths and morbidity; the threshold cannot be set independently of the health budget; the threshold can be approached from either the demand side or the supply side – the two are equivalent only in a health-maximising equilibrium; the supply-side approach generates an estimate of a ‘second best’ cost-effectiveness threshold that is higher than the ‘first best’; the second best threshold is the one generally to be preferred in decisions about adding or subtracting interventions in an established public insurance package; multiple thresholds are implied by systems having distinct and separable health budgets; disinvestment involves eliminating effective technologies from the insured bundle; differential weighting of beneficiaries’ health gains may affect the threshold; anonymity and identity are factors that may affect the interpretation of the threshold; the true opportunity cost of health care in a community, where the effectiveness of interventions is determined by their impact on health, is not to be measured in money – but in health itself.

Access to medical care and how it differs for various patients remain key policy issues. While existing work has examined clinic structure’s influence on productivity, less research has explored the link between provider mix and access for different patient types – which also correspond to different service prices. We exploit experimental data from a large field study spanning 10 US states where trained audit callers were randomly assigned an insurance status and then contacted primary care physician practices seeking new patient appointments. We find clinics with more non-physician clinicians are associated with better access for Medicaid patients and lower prices for office visits; however, these relationships are only found in states granting full practice autonomy to these providers. Substituting more non-physician labor in primary care settings may facilitate greater appointment availability for Medicaid patients, but this likely rests on a favorable policy environment. Relaxing regulations for non-physicians may be an important initiative as US health reforms continue and also relevant to other countries coping with greater demands for medical care and related financial strain.

Medical savings accounts (MSAs) allow enrolees to withdraw money from earmarked funds to pay for health care. The accounts are usually accompanied by out-of-pocket payments and a high-deductible insurance plan. This article reviews the association of MSAs with efficiency, equity, and financial protection. We draw on evidence from four countries where MSAs play a significant role in the financing of health care: China, Singapore, South Africa, and the United States of America. The available evidence suggests that MSA schemes have generally been inefficient and inequitable and have not provided adequate financial protection. The impact of these schemes on long-term health-care costs is unclear. Policymakers and others proposing the expansion of MSAs should make explicit what they seek to achieve given the shortcomings of the accounts.