Paying for health services: a public health view

Several factors are shaping the need and demand for health care; these include demographic change, the differential improvement in the survival of those with chronic conditions, and the mismatch between personal income and health. Also, medical uncertainty results in vast variations in medical practice and costs. The scope for increasing the supply of medical care, selectively to the rich or across the board, is already vast and growing. It is argued that efficient financing systems can operate only at a level at which the health benefits of interventions are measurable, i.e. the population level. Systems of individual payment are based on inevitable ignorance about expected benefits and must therefore introduce perverse (and necessarily inefficient) incentives. Population based monitoring of outcome, with coupled incentives to efficient producers, would appear to be the only method of encouraging the production of maximum social benefit from the resources used for health.