Health economists and policymakers have lots of ideas of how to improve the health care system. Yet few of these reforms are implemented. Why?
Max Hotopf of Healthcare Europa tries to answer this question in the context of Europe’s attempts at healthcare reform. Below are some of his arguments and my comments.
- Decentralization. “In most European countries healthcare policy is effectively left in the hands of regional authorities. Finland takes this to the extreme with primary and secondary care delegated to over 400 municipalities, each with 5,000 to 10,000 people.” Mr. Hotopf claims that this decentralization makes it difficult to implement health care reform. I wholeheartedly agree with Mr. Hotopf that decentralization makes implementing wholesale healthcare reforms more difficult. However, I do not necessarily imply that the solution is centralization. Generally, most economists have found that more decentralized control of government-run institutions is best. Individuals generally have higher satisfaction with government institutions on a local level than on a national level. Although these local bodies may suffer from diseconomies of scale, decentralized systems have better information about the needs of their local constituents. Thus, fixing the “problem” of decentralization will likely create more problems than it solves.
- What the public will accept/elections. Healthcare Europa states that the European public is often against any high profile privatization in the health care system. Further, changes in the political climate can easily derail reform efforts. For instance, “in the Czech republic, the social democrats took power this month and are utterly opposed to any sort of private healthcare. The privatisation programme in Slovakia has been slung into reverse.” Despite this fact, I doubt that abandoning democracy for a government of experts is a good idea [Anyone who thinks a government of experts is always good should read The Best and the Brightest about the U.S. involvement in Vietnam.]
- Professional bodies have a lot of political power and can overturn reforms. “The British Medical Association regularly scuppers government policy, such as the move towards larger polyclinics. It is two years since the Greek courts ruled that stipulations that a doctor has to own over 50% of any diagnostics lab are contrary to EU law. Yet, thanks to pressure from doctors, the Ministry of Health has constantly stalled any attempt to change the law.” Here I completely agree with Healthcare Europa.
The blog post does leave us with some sage advice: “Unless you have an intimate understanding of how private healthcare operators will behave in any situation, you will fail to come up with programmes which will harness their energy and appetite for change.”