Public Ends, Private Means : Strategic Purchasing of Health Services

by Preker, Alexander S.

• ISBN13: 9780821365472
• ISBN10: 0821365479
• Edition: 1st
• Format: Paperback
• Copyright: 2007-03-01
• Publisher: World Bank

Summary

Great progress has been made in recent years in securing better access and financial protection against the cost of illness through collective financing of health care. Managing scarce resources effectively and efficiently is an important part of this story. Experience has shown that, without strategic policies and focused spending, the poor are likely to get left out. The use of purchasing to enhance public sector performance is well-documented in other sectors. Extension to the health sector of lessons from this experience is now successfully implemented in many developing countries.'Public Ends, Private Means: Strategic Purchasing of Value for Money in Health Services' is part of a series of World Bank publications on ways to make public spending on health care more efficient and equitable in developing countries. It reviews the underlying economics in terms of agency theory, behavioral science, contract theory, transaction costs, and public choice theory. It provides a synthesis of the institutional environment needed for countries to shift to strategic purchasing, organizational incentives that need to be in place, and management capacity that needs to be strengthened. The volume is supplemented with a CD that presents six regional reviews of current resource allocation and purchasing (RAP) arrangements.

Table of Contents

Foreword	p. xiii
Acknowledgments	p. xv
Abbreviations and Acronyms	p. xvii
Introduction	p. 1
Conceptual Framework for Implementing Strategic Purchasing of Quality Health Service	p. 3
A Roadmap	p. 5
References	p. 10
Policy Framework	p. 11
Political Economy of Strategic Purchasing	p. 13
A Historical Snapshot	p. 14
The Nature of Government Failure	p. 18
Theoretical Underpinnings	p. 23
Trends in Public Sector Reforms	p. 30
Application to Health Sector	p. 31
"Make or Buy" Decision Grid	p. 34
Policy Levers Available to Governments	p. 36
Getting from Here to There	p. 45
Notes	p. 46
References	p. 48
Policy Design in Strategic Purchasing	p. 53
Introduction	p. 54
Key Policy Design Issues	p. 55
Options for Reforming the Policy Design	p. 56
Conclusions	p. 64
References	p. 65
The Organizational Structure of Purchasers	p. 67
Introduction	p. 67
Organizations Matter	p. 68
Application to Health Care Purchasing	p. 72
Organizational Forms	p. 75
Structural Configuration of Purchasers	p. 81
Incentive Regime	p. 92
Conclusions	p. 97
Notes	p. 98
References	p. 98
Institutional Environment	p. 103
Introduction	p. 103
Rationale for Institutions	p. 104
Purchasing Issues Requiring Institutional Reform	p. 106
Scope of Institutions	p. 111
Forms of Institutions	p. 114
Levels of Institutions	p. 117
Conclusions	p. 122
Note	p. 123
References	p. 123
Stewardship, Governance, and Management	p. 125
Introduction	p. 125
Management at Different Levels	p. 127
Quality Performance	p. 141
Conclusions	p. 142
Annex: Managerial Challenges	p. 144
Note	p. 146
References	p. 146
Economic Underpinnings	p. 149
Agency Theory and Its Applications in Health Care	p. 151
Basic Concepts	p. 151
Standard Agency Theory	p. 153
Agency Problems and Their Origins	p. 155
Alternative Payment Systems	p. 159
Agency in Health Care	p. 167
Note	p. 176
References	p. 176
Doctors' and Patients' Utility Functions	p. 179
Introduction	p. 179
A Framework of Interactions between Patients and Doctors	p. 180
The Patient's Utility Function	p. 181
The Doctor's Utility Function	p. 186
The Interaction between the Doctor's and Patient's Utility Functions and Its Implication for the Remuneration System	p. 190
Note	p. 193
References	p. 193
Economic Models of Doctors' Behavior	p. 195
Introduction	p. 195
The Doctor's Objective Functions	p. 196
The Doctor's Supply Behavior	p. 197
Doctors' Pricing Models	p. 198
Analysis of Doctors' Behavior in China	p. 201
Note	p. 207
References	p. 207
Economic Models of Hospital Behavior	p. 209
Introduction	p. 209
Hospital Types	p. 210
Hospital Objectives	p. 213
Economic Models of Hospital Behavior	p. 216
The Application of Hospital Behavior Models	p. 228
Note	p. 234
References	p. 234
Motivation and Performance-Related Pay	p. 237
Introduction	p. 237
Motivation Theories	p. 238
Concepts and Methods of Performance-Related Pay	p. 242
Performance-Related Pay in the Health Care Sector	p. 248
Notes	p. 255
References	p. 256
Payment Mechanisms and Provider Behavior	p. 259
Introduction	p. 259
Taxonomy of Payment Systems	p. 260
The Current Payment Systems	p. 261
Toward a Better Payment System	p. 273
Note	p. 276
References	p. 276
Supplier-Induced Demand and Unnecessary Care	p. 279
Introduction	p. 279
The Conceptual Framework of SID and UNC	p. 280
Supplier-Induced Demand	p. 284
Unnecessary Care	p. 295
Toward Better Efficiency of Care	p. 304
Note	p. 306
References	p. 306
The Organization of Publicly Financed Health Care Services	p. 311
Introduction	p. 311
Purchasing Medical Care and Coordinating Services	p. 312
Allocating Control and Cash-Flow Rights	p. 313
Allocating Authority over Coordination and Medical Functions	p. 315
Contracting with Nongovernmental Organizations	p. 317
Some Examples of Contracting	p. 318
Conclusions	p. 319
Notes	p. 320
References	p. 321
Contracting for Medical Care: Providing Incentives and Controlling Costs	p. 323
Introduction	p. 323
Types of Health Care Funding Mechanisms	p. 324
Contracting and Asymmetric Information	p. 325
Applying Contract Theory to the Purchase of Health Services	p. 336
Competition and Regulation	p. 343
Some Conclusions	p. 346
Notes	p. 347
References	p. 348
Framework for Evaluation	p. 351
Measuring Efficiency in Purchasing	p. 353
Introduction	p. 353
Concepts of Efficiency	p. 354
Measurement of Organizational Efficiency	p. 359
Measurement of Social Efficiency	p. 376
Note	p. 381
References	p. 381
About the Coeditors and Contributors	p. 385
Index	p. 393
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