While some speak of the health care market, this market often does not reflect the models of perfect competition in which there is an homogeneous product, many buyers and sellers and perfect information. Areas like public health and infectious and communicable disease management appear to be particularly public sector activities and are likely to remain so. Unless private insurers are to be given access to services in public hospitals, they will not be able to offer cover for all risks, other than by duplicating expensive acute services in private hospitals. In practical terms, the development and evaluation of health policy alternatives can commonly result in some balancing of different policy goals - particularly those of efficiency, equity and choice. Often it is claimed that the private sector is more efficient than the public - but these issues require careful examination because of differences in case mix and the underlying health status of the populations which are served.
Governments have a number of instruments which can be used to affect private markets.
These involve the creation and dissemination of information, the regulation of private activity, the mandating of certain actions by individuals or firms, the funding of health services or the delivery of those services through public sector institutions. The most appropriate roles for the private and public sectors must be developed over time and partly as a response to experiments conducted. Public sector choices must be made with consideration and evaluation of the implications for various policy settings of adopting different positions regarding the roles and interfaces of the public and private sectors in health care. In this environment it will be important to try to assist any strategy which allows for clarity of public entitlement to care and focus further attention on ways in which private sector policies can be defined in relation to these responsibilities. The institution of hospital booking systems provides an example of some improvement in terms of getting greater clarity in public sector service entitlement.