Market strategies for publicly financed health care systems

Most West European countries have health care systems financed by social insurance funds. In these pluralistic systems, decision-making processes are complex and involve many factors. The present paper focuses on the decision-making behavior of public authorities in health care. It is stressed that understanding the functioning of the political market is essential for explaining the development and performance of health care systems. This political market receives relatively little attention from economists. Specific mechanisms as they can be observed in this market are discussed, and the paper concludes with a plea for reducing the role of government in planning and price-setting in health care.