Managing the health care market in developing countries: prospects and problems
Broomberg, J.
Health Policy and Planning 9(3): 237-251
1994
ISSN/ISBN: 0268-1080 PMID: 10137740 DOI: 10.1093/heapol/9.3.237Document Number: 286878
This review examines the prospects for reforms in health care provision in a developing country context, with a specific focus on the provision of hospital services. The paper begins with a discussion of the current policy context of these reforms, and their main features. It argues that while current and proposed reforms vary in detail, most have in common the introduction of competition in the provision of health care, with the retention of a public monopoly of financing, and that this structure emerges from the dual goals of addressing current public sector inefficiencies while retaining the known equity and efficiency advantages of pubic health systems. It then explores the theoretical arguments and empirical evidence for and against these reforms, and examines their relevance for developing countries. Managed markets are argued to enhance both efficiency and equity. These arguments are analysed in terms of three distinct claims made by their proponents: that managed markets will promote increased provider competition and, hence, provider efficiency; the contractual relationships are more efficient than direct management; and that the benefits of managed markets will outweigh their costs. The analysis suggests that the theoretical arguments and empirical evidence remain ambiguous, and that this ambiguity is attributable in part to poor understanding of the behaviour of health sector agents within the market, and to the limited experience with these reforms. In the context of developing countries, most of the conditions required for successful implementation of these reforms are absent in few, richer developing countries, and that the costs of these reforms, particularly in equity terms are likely to pose substantial problems. Extensive managed market reforms are therefore unlikely to succeed, although limited introduction of particular elements of these reforms may be more successful. Developed country experience is useful in defining the conditions under which such limited reform may succeed. There is need to evaluate the existing experience of different forms of contracting in developing countries, as well as to interpret emerging evidence from developed country reforms in the light of conditions in developing countries.