Health reform is ongoing in nearly every OECD country in response to concerns over growing health expenditures. As government is the primary payer in many countries, there has been particular concern over the growth in government expenditures. This concern is aggravated by the prospect of an aging population with high expectations as to the satisfaction of their health care needs and wants. Access concerns have arisen in countries that rely to a greater degree on private finance, such as the US and the Netherlands, as private insurers increasingly refuse to provide coverage to high-risk people or charge them such high premiums that they are unable to afford coverage. In countries where governments have tightly controlled health expenditures, such as the UK and New Zealand, there have been access concerns over growing waiting lists and times, and concerns that the allocation of resources, left to physicians’ discretion, is not occurring in a fair or efficient way. Policy makers in all jurisdictions have also become increasingly aware of a body of economic literature emphasizing that there is no evidence of the cost-effectiveness or even effectiveness of many health care services supplied. A general concern has arisen that prioritization of health care needs and the supply of health care services has unduly emphasized acute care and expensive technologies over primary and preventive care. This allocation pattern, it is argued, reflects what is optimal from the medical profession’s perspective as opposed to what is optimal for society.
Throughout the 1980s, many OECD countries sought to control increasing expenditures on health by limiting the total amount of resources available to their respective health care systems. In single-payer systems this was achieved by capping government expenditures, by changing the method of payment to hospitals from reimbursing for all costs incurred to a prospective annual budget (thus devolving to hospitals a measure of budgetary responsibility), and by reducing the number of hospitals and hospital beds and the numbers of health care providers. This macro cost-containment approach is grounded in the