Governments faced with rising costs and growing demand are constantly searching for methods of delivering higher productivity in health care, or put more simply, ways of getting higher quality without increasing expenditure. One currently favoured mechanism is to encourage competition between the suppliers of care. But will this work? The appeal is simple – competition works in the rest of the economy therefore it should work in health care.
Unfortunately for politicians, the simple appeal does not necessarily translate across sectors of the economy. There is, in fact, no strong theoretical support for competition in healthcare leading to better outcomes: the predictions of economic theory on this issue are quite ambiguous (1). However, under certain condition, theory models do support competition: this is when prices are fixed by government and hospitals compete in terms of quality.
Testing this theory is often difficult, because competition in health care markets…
View original post 743 more words
Utopia, you are standing in it! 
Recent Comments