Review

Buddy, can you paradigm?

PLANNED MARKETS AND PUBLIC COMPETITION: STRATEGIC REFORM IN NORTHERN EUROPEAN HEALTH CARE SYSTEMS
Richard B Saltman And Casten Von Otter
Open University Press, 1992

The 1991 reform of the British health service was a potent, yet confused, brew of managerial efficiency drive fermented with consumerist rhetoric. The result, though not yet mature, has proved thus far to be an unpalatable, primitive broth in which the mutant life-forms of a now divided service vie with one another for evolutionary advantage.

Faced with this uncertain situation, any account of such change which helps to place it in an international context must be given a cautious welcome.

Planned markets and public competition is just such a book. The authors, academics from the US and Sweden, argue that ‘publicly operated health systems are poised at the edge of a new policy paradigm, a new conceptual framework for delivering health services, which we term ‘planned markets’’. Examination of recent reforms in the UK, Finland and Sweden provides the empirical evidence to support the broad thrust of the argument.

For instance, by the early 1980s there had been some limited experience in Sweden with the contracting out of ancillary and support services, akin to the competitive tendering exercise being pushed forward at the same time in Britain. But since 1985 the Swedes have extended contracting into such core clinical areas as primary care and elective surgery.

Similarly, the Finnish Personal Doctor Programme, launched in 1985, sought to increase the internal efficiency of publicly-funded health centres through altering funding arrangements to include a proportion of the budget determined by the percentage of a doctor’s list seen at least once during the payment period. In recent years, national and municipal government in Finland have approved the referral of patients to as far afield as Estonia, Spain and even London for elective surgery -- paid for publicly.

Public competition, in these health systems, arises from competition between providers in a publicly-financed, cash-limited market in which there is an attempt to define the rules of the market place to maximise both efficiency and public services objectives.

Saltman and von Otter argue in favour of such an approach not only for the claimed flexibility and efficiency, but also in terms of ‘civil democracy’.

As they point out, at the heart of such a system has to be a mechanism for translating the provider’s ability to meet publicly-defined performance standards into a new level of ‘flexible budget’ for that provider. To date, performance measures -- such as the number of patients referred, or the post-operative infection rate -- are only able to reflect, at best, very crude ideas of what good health care is about.

Overall, this book provides an informative discussion of a key area of change in welfare services. Unfortunately, the force of the argument is often lost in a welter of academic jargon and impenetrable sentence construction. This is a thought-provoking, though difficult, read.