Editors Alexander S. Preker Xingzhu Liu Edit V. Velenyi Enis Baris Public Disclosure Authorized ...

440 Pages·2007·1.95 MB·English

by  World Bank Group

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P Alexander S. Preker
Xingzhu Liu
Edit V. Velenyi
Enis Baris

Public Ends, Private Means

Public Ends, Private Means
Strategic Purchasing of Health Services
Edited by
Alexander S. Preker, Xingzhu Liu, Edit V. Velenyi, and Enis Baris
THE WORLD BANK
Washington, D.C.
©2007 The International Bank for Reconstruction and Development / The World Bank
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ISBN-10: 0-8213-6547-9
ISBN-13: 978-0-8213-6547-2
eISBN-10: 0-8213-6548-7
eISBN-13: 978-0-8213-6548-9
DOI: 10.1596/978-0-8213-6547-2
Library of Congress Cataloging-in-Publication Data
Public ends, private means: strategic purchasing of health services / edited by
Alexander S. Preker ... [et al.].
p. ; cm.
Includes bibliographical references and index.
ISBN-13: 978-0-8213-6547-2 (alk. paper)
ISBN-10: 0-8213-6547-9 (alk. paper)
ISBN-10: 0-8213-6548-7 (e-ISBN)
1. Medical economics--Developing countries. 2. Medical care, Cost of--Developing countries.
3. Medical policy--Developing countries. I. Preker, Alexander S., 1951– II. World Bank.
[DNLM: 1. Health Services--economics. 2. Developing Countries. 3. Financing,
Government--economics. 4. Organizational Policy. 5. Private Sector--economics.
W 84.1 P976 2007]
RA410.5.P795 2007
338.4'73621--dc22
2006023410
Contents
Foreword
Eyitayo Lambo xiii
Acknowledgments xv
Abbreviations and Acronyms xvii
Introduction 1
Alexander S. Preker, Xingzhu Liu, Edit V. Velenyi, and Enis Baris
Conceptual Framework for Implementing Strategic Purchasing
of Quality Health Services 3
A Roadmap 5
References 10
PART I POLICY FRAMEWORK 11
1. Political Economy of Strategic Purchasing 13
Alexander S. Preker and April Harding
A Historical Snapshot 14
The Nature of Government Failure 18
Theoretical Underpinnings 23
Trends in Public Sector Reforms 30
Application to Health Sector 31
“Make or Buy” Decision Grid 34
Policy Levers Available to Governments 36
Getting from Here to There 45
Notes 46
References 48
2. Policy Design in Strategic Purchasing 53
Alexander S. Preker, John C. Langenbrunner, and Paolo C. Belli
Introduction 54
Key Policy Design Issues 55
Options for Reforming the Policy Design 56
Conclusions 64
References 65
v
vi Contents
3. The Organizational Structure of Purchasers 67
Alexander S. Preker, Edit V. Velenyi, Cristian C. Baeza, and Melitta Jakab
Introduction 67
Organizations Matter 68
Application to Health Care Purchasing 72
Organizational Forms 75
Structural Confi guration of Purchasers 81
Incentive Regime 92
Conclusions 97
Notes 98
References 98
4. Institutional Environment 103
Hernán L. Fuenzalida-Puelma, Reinhard R. Haslinger,
and Alexander S. Preker
Introduction 103
Rationale for Institutions 104
Purchasing Issues Requiring Institutional Reform 106
Scope of Institutions 111
Forms of Institutions 114
Levels of Institutions 117
Conclusions 122
Note 123
References 123
5. Stewardship, Governance, and Management 125
Alexander S. Preker, Reinhard R. Haslinger, Reinhard Busse,
and Magda Rosenmöller
Introduction 125
Management at Different Levels 127
Quality Performance 141
Conclusions 142
Annex: Managerial Challenges 144
Note 146
References 146
PART II ECONOMIC UNDERPINNINGS 149
6. Agency Theory and Its Applications in Health Care 151
Xingzhu Liu and Anne Mills
Basic Concepts 151
Standard Agency Theory 153
Agency Problems and Their Origins 155
Contents vii
Alternative Payment Systems 159
Agency in Health Care 167
Note 176
References 176
7. Doctors’ and Patients’ Utility Functions 179
Xingzhu Liu and Anne Mills
Introduction 179
A Framework of Interactions between Patients and Doctors 180
The Patient’s Utility Function 181
The Doctor’s Utility Function 186
The Interaction between the Doctor’s and Patient’s Utility
Functions and Its Implication for the Remuneration System 190
Note 193
References 193
8. Economic Models of Doctors’ Behavior 195
Xingzhu Liu and Anne Mills
Introduction 195
The Doctor’s Objective Functions 196
The Doctor’s Supply Behavior 197
Doctors’ Pricing Models 198
Analysis of Doctors’ Behavior in China 201
Note 207
References 207
9. Economic Models of Hospital Behavior 209
Xingzhu Liu and Anne Mills
Introduction 209
Hospital Types 210
Hospital Objectives 213
Economic Models of Hospital Behavior 216
The Application of Hospital Behavior Models 228
Note 234
References 234
10. Motivation and Performance-Related Pay 237
Xingzhu Liu and Anne Mills
Introduction 237
Motivation Theories 238
Concepts and Methods of Performance-Related Pay 242
Performance-Related Pay in the Health Care Sector 248
Notes 255
References 256
viii Contents
11. Payment Mechanisms and Provider Behavior 259
Xingzhu Liu and Anne Mills
Introduction 259
Taxonomy of Payment Systems 260
The Current Payment Systems 261
Toward a Better Payment System 273
Note 276
References 276
12. Supplier-Induced Demand and Unnecessary Care 279
Xingzhu Liu and Anne Mills
Introduction 279
The Conceptual Framework of SID and UNC 280
Supplier-Induced Demand 284
Unnecessary Care 295
Toward Better Effi ciency of Care 304
Note 306
References 306
13. The Organization of Publicly Financed Health Care Services 311
William Jack
Introduction 311
Purchasing Medical Care and Coordinating Services 312
Allocating Control and Cash-Flow Rights 313
Allocating Authority over Coordination and Medical Functions 315
Contracting with Nongovernmental Organizations 317
Some Examples of Contracting 318
Conclusions 319
Notes 320
References 321
14. Contracting for Medical Care: Providing Incentives
and Controlling Costs 323
William Jack
Introduction 323
Types of Health Care Funding Mechanisms 324
Contracting and Asymmetric Information 325
Applying Contract Theory to the Purchase of Health Services 336
Competition and Regulation 343
Some Conclusions 346
Notes 347
References 348