Planning and market regulation: strengths, weaknesses and interactions in the provision of less inequitable and better quality health care

This paper argues that planned health care provision and market regulation play distinct roles in relation to the effective provision of equitable health care. Governmental planned provision has as a core objective ensuring that the health system is redistributive and that the poor have access to competent care. Market regulation has as its central objective the shaping of the role and behaviour of the private sector within the health system. Management of the health system as a whole, which is a governmental responsibility, therefore requires the integration of planning and regulation in a manner appropriate to each particular context. All health systems are 'mixed', involving both private and public initiative. This paper defines a concept of health care commercialisation, and shows that, based on the data and sources available, higher levels of commercialisation are rather systematically associated with worse and more unequal health care access and health outcomes. Some, but not all of this finding can be explained by the association of higher commercialisation with lower average incomes. Case-based exploration of the reasons for the finding suggests that low-income unregulated fee-for-service commercialisation is particularly damaging to health outcomes, and solutions are urgently required. At higher incomes, where patterns of commercialisation are driven by large private firms (providers and insurers) seeking to segment the market and serve its high income segment, the regulatory challenge is to shape the role of these firms in a manner that allows sustained redistribution. In the case of publicly planned provision, the evidence surveyed shows that countries that spend more via government - directly or through social health insurance mechanisms - have generally better and more equitable outcomes, and that those who ally higher government spending to a universalist commitment to open access and to very low or no charges at the point of use, do particularly well, achieving high levels of access at lower incomes, containing catastrophic expenditures, and (perhaps counter-intuitively) ensuring that the extensive private provision in these systems plays a complementary role in serving the better off. This is the converse of the finding for systems where the public sector has largely collapsed or has become strongly fee-based : here the poorest citizens struggle disproportionately to gain access to private providers and catastrophic payments are a serious source of impoverishment. The paper illustrates what is meant by the integration of planned provision and market regulation with reference to four contexts. It argues: for planning public health care to operate as 'beneficial competition' for private providers in low income health markets; that sustaining public benefit culture in the public and non-governmental sectors is key to promoting planning-regulatory synergy, and that this requires constraining public sector marketisation; that the regulation of private providers and constraint of private insurers can be done effectively through the extension of social health insurance, but the technical demands are considerable and the political process of gaining consensus to support compulsion is essential; and that integrating 'classical' regulation with planning can be highly successful in shaping access to essential drugs and other essential commercial inputs to the health system. The paper concludes that in no case can the need for competent public leadership and management of the system be avoided. Where it cannot be established, it is however possible for large non-governmental organisations to play a quasi-governmental role in planned provision.