Competition versus planning in health care: implications for corporate and individual incentives, efficiency &...

This paper is about the management of change; and, most especially, about the changing tides of thinking that health planning and, more latterly, competition could bring about desired change in the health industry towards cost containment, efficiency and control. Looking back over the decade of the 1980s, it was characterised, for many countries, as a real questioning of the role of the public sector in people's life, and--in terms of public/private provision--a re-examination of what is public and should be. Coupled with this inquiry was a growing belief that comprehensive health planning was too lofty a goal, and that however elegant in theory, its delivery in practice fell far short of its ideals. Attention has therefore focused on the workings of competitive markets, and the extent to which objectives of cost containment and economic efficiency can be better addressed through competition and internal markets. In reality, the mixed economy is the only policy option available to developed countries today. Public and private monopolies are frowned upon, and the search is on for intermediate possibilities that capture some of the advantages of markets without their disadvantages, and arrangements that motivate consumer choice and simultaneously yield efficiency in the production and distribution of health care. By way of illustration, this paper looks at a number of innovations taking place to address these issues; and, in the context of the UK, at the most recent government proposals in respect of self-governing trusts and GP budget holders, as illustrations of the move towards the internal market, or to managed competition. Not surprisingly, the two areas that feature large on the agenda are hospital (and community) information systems; and, the motivations, rewards and penalties of the provider institutions that deliver services, and the consumers and purchasers who will "buy" them. Whether the mould can and should be broken is left tantalisingly open in the concluding remarks, save that at the very least, it does require both political will and medical compliance.