Excess capacity: markets regulation, and values.
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OBJECTIVE: To examine the conceptual bases for the conflicting views of excess capacity in healthcare markets and their application in the context of today's turbulent environment. STUDY SETTING: The policy and research literature of the past three decades. STUDY DESIGN: The theoretical perspectives of alternative economic schools of thought are used to support different policy positions with regard to excess capacity. Changes in these policy positions over time are linked to changes in the economic and political environment of the period. The social values implied by this history are articulated. DATA COLLECTION: Standard library search procedures are used to identify relevant literature. PRINCIPAL FINDINGS: Alternative policy views of excess capacity in healthcare markets rely on differing theoretical foundations. Changes in the context in which policy decisions are made over time affect the dominant theoretical framework and, therefore, the dominant policy view of excess capacity. CONCLUSIONS: In the 1990s, multiple perspectives of optimal capacity still exist. However, our evolving history suggests a set of persistent values that should guide future policy in this area. (+info)
The future of managed care organization.
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This paper analyzes the transformation of the central organization in the managed care system: the multiproduct, multimarket health plan. It examines vertical disintegration, the shift from ownership to contractual linkages between plans and provider organizations, and horizontal integration--the consolidation of erstwhile indemnity carriers, Blue Cross plans, health maintenance organizations (HMOs), and specialty networks. Health care consumers differ widely in their preferences and willingness to pay for particular products and network characteristics, while providers differ widely in their willingness to adopt particular organization and financing structures. This heterogeneity creates an enduring role for health plans that are diversified into multiple networks, benefit products, distribution channels, and geographic regions. Diversification now is driving health plans toward being national, full-service corporations and away from being local, single-product organizations linked to particular providers and selling to particular consumer niches. (+info)
Medical technology and inequity in health care: the case of Korea.
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There has been a rapid influx of high cost medical technologies into the Korean hospital market. This has raised concerns about the changes it will bring for the Korean health care sector. Some have questioned whether this diffusion will necessarily have positive effects on the health of the overall population. Some perverse effects of uncontrolled diffusion of technologies have been hinted in recent literature. For example, there is a problem of increasing inequity with the adoption of expensive technologies. Utilization of most of the expensive high technology services is not covered by national health insurance schemes; examples of such technologies are Ultra Sonic, CT Scanner, MRI, Radiotherapy, EKG, and Lithotripter. As a result, the rich can afford expensive high technology services while the poor cannot. This produces a gradual evolution of classes in health service utilization. This study examines how health service utilization among different income groups is affected by the import of high technologies. It discusses changes made within the health care system, and explains the circumstances under which the rapid and excessive diffusion of medical technologies occurred in the hospital sector. (+info)
Contracting out of health services in developing countries.
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Contracting out is emerging as a common policy issue in a number of developing countries. The theoretical case for contracting out suggests many advantages in combining public finance with private provision. However, practical difficulties such as those of ensuring that competition takes place between potential contractors, that competition leads to efficiency and that contracts and the process of contracting are effectively managed, suggest that such advantages may not always be realized. Most countries are likely only to contemplate restricted contracting of small-scale non-clinical services in the short term. Prerequisites of more extensive models appear to be the development of information systems and human resources to that end. Some urban areas of larger countries may have the existing preconditions for more successful large-scale contracting. (+info)
Managing the health care market in developing countries: prospects and problems.
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There is increasing interest in the prospects for managed market reforms in developing countries, stimulated by current reforms and policy debates in developed countries, and by perceptions of widespread public sector inefficiency in many countries. This review examines the prospects for such reforms in a developing country context, primarily by drawing on the arguments and evidence emerging from developed countries, 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 public health systems. The paper 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; that contractual relationships are more efficient than direct management; and that the benefits of managed markets will outweigh their costs. The analysis suggests that on all three issues, 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, the paper argues that most of the conditions required for successful implementation of these reforms are absent in all but a 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 reforms may succeed. There is an urgent 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. (+info)
The relationship and tensions between vertical integrated delivery systems and horizontal specialty networks.
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This activity is designated for physicians, medical directors, and healthcare policy makers. GOAL: To clarify the issues involved with the integration of single-specialty networks into vertical integrated healthcare delivery systems. OBJECTIVES: 1. Recognize the advantages that single-specialty networks offer under capitated medical care. 2. Understand the self-interests and tensions involved in integrating these networks into vertical networks of primary care physicians, hospitals, and associated specialists. 3. Understand the rationale of "stacking" horizontal networks within a vertical system. (+info)
The three dimensions of managed care pharmacy practice.
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Our goal is to provide a framework for pharmacy in an evolving healthcare marketplace by identifying and discussing the three dimensions of pharmacy practice: (1) pharmacy practice across the continuum of care; (2) the major elements of pharmacy practice; and (3) the evolution of pharmacy during the five stages of the development of managed care. The framework was devised under the proposition that there is a substantial consistency in what patients need or should expect from pharmacists. As integrated health systems develop, pharmacists must apply their skills and knowledge across the continuum of care to ensure that they play an integral part in the systems. In a managed care environment characterized by change and the development of integrated health systems, pharmacists have opportunities to become involved directly in patient care in such areas as disease prevention, home healthcare, primary care, and subacute care. Information systems, hospital drug distribution, clinical pharmacy, and the fiscal environment comprise the major elements of pharmacy practice within an integrated health system, and the way in which each of these elements evolves as the healthcare market adapts to managed care is critical to pharmacy practice. If the pharmacy profession can demonstrate its ability to manage disease and health, improve outcomes, and reduce costs within the evolving healthcare system, pharmacists will play a vital role in the managed healthcare market in the approaching new millennium. (+info)
The political economy of capitated managed care.
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Despite the fact that billions of dollars are being invested in capitated managed care, it has yet to be subjected to the rigors of robust microeconomic modeling; hence, the seemingly intuitive assumptions driving managed care orthodoxy continue to gain acceptance with almost no theoretical examination or debate. The research in this paper finds the standard unidimensional model of risk generally used to analyze capitation--i.e., that risk is homogenous in nature, organizationally fungible, and linear in amplitude--to be inadequate. Therefore, the paper proposes to introduce a multidimensional model based on the assumption that phenomenologically unrelated species of risk result from non-homogenous types of socioeconomic activity in the medical marketplace. The multidimensional analysis proceeds to concentrate on two species of risk: probability risk and technical risk. A two-dimensional risk matrix reveals that capitation, far from being a market-oriented solution, actually prevents the formation of a dynamic price system necessary to optimize marketplace trades of medical goods and services. The analysis concludes that a universal attempt to purchase healthcare through capitation or any other insurance mechanism would render the reasonable attainment of social efficiency highly problematic. While in reality there are other identifiable species of risk (such as cost-utility risk), the analysis proceeds to hypothesize what a market-oriented managed care approach might look like within a two-dimensional risk matrix. (+info)