PMO - L3 - The state and the private sector in health policy

why is there state interference in the health sector

• (1.)equity principles; so the poor people can also access healthcare

• so there is no discrepancy between health care that is needed versus profitable (C sections are more profitable)

• information asymmetry

  • knowledge gap between patients and doctors (they may say a c section is needed when it actually isn’t because they make more money).

• external effects

  • can be both positive and negative

  • people who pay for it and people who benefit is always different

• big pharma have monopolies, the hospitals, and the insurance companies.

  • if you leave it up to insurance, they only give people in good health insurance

• (4.)high uncertainties and high cost 

extent of role of state depends on ethical underpinning

• access to health services are comparable to other goods and services → private markets, state only has role in providing for the poor

• health as human right and everybody should have access irrespective of income → equal access, health care provided by the state. 

health system reform

• state was not efficient and cost effective provider of (health) services

• 2 theories to understand this

  • Public choice theory → politicians and civil servants pursue own interests → not in their interest to take care of junkies 

  • property rights theory → no incentives to maximize efficiency of resource use → survival is not at stake. 

• pushed by High income countries.

health system reform problems 

• technological developments increase costs and…

• …

• …

health facility assessment done in Indonesia

• there are 10 000 primary health centers in archipelago → looked at availability of staff, medicine, equipment

• 60 most essential medicine were looked into (did the public health centers have these or not)

• on average 58% were not available

• op java is health care en medicine supply goed geregeld via public health centers, verder niet.

  • op java woont 60% van de inwoners van indonesia

  • en op java zijn de producers van de medicijnen (fabrieken).

• in the public system you need to pay to get a job → bribery is everywhere → to become a police officer costs 10 000 euro (to bribe head officer)

the pharmaceutical supply chain

• private approach to distributing the medicine → then it will only be available in places were money can be made

  • such as densely populated Java, it will not be available in hard to reach islands.

• in Indonesia a fund was put up to but the medicine and get the medicine in remote areas→ didn’t work first years because civil servants were more interested in keeping their job and they did not want to go the the distributer and put their job on the line.

health reform current ideology 

• slimmed down state through 

• introduction of market pressures for public services → new public management 

  • competition for contracts from public purchasers

  • competitive tendering of support services

• new financial mechanisms

  • introduction of out of pocket fees for service use.