Accountability of health care service purchasers
Comparing internal markets and managed competition
In this chapter I analyze and compare internal market and managed competition reform from the perspective of the accountability of purchasers (be they government-appointed authorities or competing private insurers) to the citizens they ultimately represent. Enhancing accountability was cited as a goal of internal market reform of the former command-and-control systems of the UK and New Zealand.
Although improving accountability is often cited as a key goal of health care reform, it is often unclear what exactly is meant by accountability. This chapter explores to whom and for what a decision-maker is accountable. Improving accountability should improve the quality of decision-making by reducing agency costs between decision-makers and the public she/he represents. What is the scope of “accountability?” In the health sector it is possible to identify at least three spheres of accountability: political, market, and professional.
This book focuses primarily on how to ensure accountability through political and market mechanisms. However, reference is made to professional accountability and this is further developed in Chapter 7, which discusses mechanisms to ensure the quality of health care services supplied. In this chapter I will:
|• argue that a series of difficult agency questions and public choice problems arise with respect to the accountability of government-appointed purchasers in the UK and New Zealand, and that there are not the incentives in place necessary to ensure that government-appointed purchasers are responsive to the citizens they represent; |
|• evaluate the prospects for the use of political “voice” by citizens as a means of reducing agency costs between citizens and the government-appointed purchasers that represent them; |
|• canvass the advantages and disadvantages of some of the possible means of enhancing voice and the limits of voice as an accountability and efficiency enhancing mechanism. |
In addition to political voice, I examine “exit,” a market mechanism, as a means of improving accountability. In managed competition proposals in the