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20 Dalhousie L.J. 470 (1997)
Accountability of Health Service Purchasers: Comparing Internal Markets and Managed Competition Reform Models

handle is hein.journals/dalholwj20 and id is 470 raw text is: Colleen M. Flood*               Accountability of Health Service
Purchasers: Comparing Internal
Markets and Managed
Competition Reform Models
A numberof countries, including the U.K., NewZealand, the Netherlands, and the
U.S., have attempted to reform their health care systems using internal market
or managed competition reform models. These models signal a departure from
reliance on passive indemnity payers or insurers and require proactive purchas-
ers to intervene actively and manage allocation decisions made by physicians.
The author explores how these models will ensure the accountability of these new
decision-makers to the citizens and patients they ultimately represent. Neither
model is found to address accountability issues sufficiently. However, the
managed competition model offers the promise of tailoring market (exit), political
(voice) and regulatory mechanisms to create the optimal mix of incentives. It is
argued that every type of health system (including Canada's) has long overlooked
accountability and governance mechanisms. Decision-makers must have incen-
tives to make decisions which strike the right balance between patients' needs
and societal interest, and more generally between equity and efficiency. Solving
this key problem demands the attention of policymakers, lawyers, and
Plusieurs pays, dont le Royaume-Uni, la Nouvelle-Zelande, les Pays-Bas et les
Etats-Unis, ont essaye de rWformer leurs systemes de sant6 sur le modele du
,march6 domestique ou de la -concurrence dirig6e,. Ces modules marquent
un ecart du systeme qui d~pendait des paiements des indemnites par des
payeurs passifs ou par des assureurs et ils requierent l'intervention active des
acheteurs et leur implication au niveau de la gestion des d6cisions d'affectations
prises par les m6decins. L'auteur explore comment ces modeles assureront la
responsabilite financiere des nouveaux d6cideurs vis-6-vis les citoyens et les
patients qu'ils repr~sentent en fin de compte. Aucun de ces modules traite
suffisammentla question de la responsabilite financiere des d~cideurs. Cependant,
le module de concurrence dirig6e offre la perspective d'un march6 personnalis6,
d'une voix politique et de mecanismes reglementaires pour presenter le m6lange
d'incitations le plus efficace. II a 6t6 avancd que chaque module de systeme de
sante (incluant celui du Canada) a Iongtemps ignor6 les m6canismes concernant
la responsabilit6 financiere et la gerance. Les decideurs doivent avoir des
incitations pour prendre des d6cisions qui crient le bon 6quilibre entre les
* Associate Director, Health Law Institute, Dalhousie University. This research was gener-
ously supported by the Centre for the Study of State and Market, Faculty of Law, University
of Toronto and an earlier version was released as working paper by the Centre. Special thanks
to Michael Trebilcock for his insightful comments on various drafts of this paper. Thanks also
to Vaughan Black, Peter Coyte, Richard Devlin, Jocelyn Downie, Colin Scott, Tom Rathwell,
Andreas Warburton and an anonymous reviewer for their comments. All errors and omissions
remain the author's.

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