Health System Reforms in Industrialized Democracies: An Emerging Paradigm

Abstract

Despite the wide variety of health care systems in industrialized democracies, a universal paradigm for financing, organization, and macromanagement has been emerging through reforms of the past decade. The policies within this paradigm attempt to promote equity, social efficiency, and consumer satisfaction by combining the advantages of public finance principles--universal access and control of spending--with the advantages of competitive market principles--consumer satisfaction and internal efficiency. This paradigm is characterized by three systemic functions: (1) financing of care, based on public finance principles, not necessarily carried out by government; (2) organization and management of publicly funded care consumption by either competing nongovernmental entities or noncompeting public administrations; and (3) provision of care based on competitive market principles. The institutional arrangement of these functions lends itself to the creation of two internal markets for consumer choice and, of the three, the second function is a key component of the emerging paradigm.

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