Market and evaluation roles in quality assurance

Competitive markets and formal evaluations offer distinctly different mechanisms for controlling the quality of care based on patients' choices as consumers and applied scientific methods, respectively. As the difficulty of acquiring relevant information and its skewness toward providers becomes greater, the need for evaluations increases. Thus the complexities of medical care tend to limit the range of the market. Markets, however, provide information on value, accommodating differences in patient preferences and cost conditions not readily obtained with formal evaluations. Through incentives, markets integrate the evaluation and control functions and may create greater efficiency and responsiveness. A variety of organizational structures for quality assurance are available, and formal evaluations are often incorporated within a market context. The policy task addressed here is to specify how, as conditions vary, greater reliance should be placed on market competition or on formal evaluations and external regulation.