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Topics: Health economics, Medicine, Healthcare Pages: 88 (27182 words) Published: December 24, 2012
Centre for Economic Policy Research Center for Economic Studies Maison des Sciences de l'Homme

Alternative Systems of Health Care Provision Author(s): Timothy Besley, Miguel Gouveia and Jacques Drèze Reviewed work(s): Source: Economic Policy, Vol. 9, No. 19 (Oct., 1994), pp. 199-258 Published by: Wiley on behalf of the Centre for Economic Policy Research, Center for Economic Studies, and the Maison des Sciences de l'Homme Stable URL: http://www.jstor.org/stable/1344496 . Accessed: 24/12/2012 16:11 Your use of the JSTOR archive indicates your acceptance of the Terms & Conditions of Use, available at . http://www.jstor.org/page/info/about/policies/terms.jsp

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Alternative systems of health care provision
Timothy Besley and MiguelGouveia
and of Princeton University University Pennsylvania

1. I[ntroduction Around the developed world, many health care systems are in crisis. Populations feel either that the cost of running their systems is too high or that the quality of provision is declining. Possibly these are two sides of the same coin. If there is a fundamental tendency for costs to rise, something must give; either consumers will consume less or budget shares will have to rise. However, from a policy point of view this will create a state of flux. Society will look for ways to get more for less. If there are better institutional and regulatory solutions for the provision of health care, rising costs may be the catalyst to seek them out. This paper looks at crosscountry experience in running health care systems since 1960, with a particular focus on the experience of the 1980s. Through this lens, we endeavour to compare the performance of alternative systems of finance and delivery and to discuss directions of policy reform. We focus on two main driving forces in health care debates. The first is technological change: new medical interventions have appeared continually. For reasons that we discuss below, the issue of who gains access to new technologies is a key feature of any system for delivering medical care. In addition, as Baumol (1993) has recently argued, the health care sector is one in which technological change tends not to be labour-saving and will, therefore, inevitably experience rising per unit costs. This observation is key for understanding some recent debates. The second driving force is the norm of universal access to health care. Every developed society of the world maintains (in rhetoric at least) a

Wewould like to thank our discussants,Jacques Dr&zeand Michael Keen, for useful suggestions. We are also grateful to David Begg, John Black, David Cutler, Paul Grout, Guy Laroque, Paul Seabright, Paul Starr, Sharon Tennyson and Norman Thurston for helpful comments.

This content downloaded on Mon, 24 Dec 2012 16:11:43 PM All use subject to JSTOR Terms and Conditions

1994 Printedin GreatBritain Economic PolicyOctober

Health care
TimothyBesley and Miguel Gouveia

Summary
Rising costs of health care provision throughoutthe world have a and provoked vigorousdebateaboutthe designof healthcaresystems the role of government in health care. In countries that have socialprovision, thereare movestowards predominantly privatization and directattempts regulate to prices.In moremarket-oriented systems, uninsured and risingcostsseemto...
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