Privatization and bidding in the health-care sector

Randall R. Bovbjerg, Philip J. Held and Mark V. Pauly
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Randall R. Bovbjerg: Health Policy Center of The Urban Institute, Washington, D.C., Postal: Health Policy Center of The Urban Institute, Washington, D.C.
Philip J. Held: Health Policy Center of The Urban Institute, Washington, D.C., Postal: Health Policy Center of The Urban Institute, Washington, D.C.
Mark V. Pauly: Professor of Health Care Management and Economics, Wharton School and Executive Director, The Leonard Davis Institute of Health Economics, University of Pennsylvania, Postal: Professor of Health Care Management and Economics, Wharton School and Executive Director, The Leonard Davis Institute of Health Economics, University of Pennsylvania

Journal of Policy Analysis and Management, 1987, vol. 6, issue 4, 648-673

Abstract: Public provision of health care, as under Medicare and Medicaid, traditionally “privatized” major production decisions. Providers of care, largely private physicians and hospitals (but also public hospitals), made significant decisions about public beneficiaries' access to care, the quality and quantity of individual services, and the prices to be paid. The result was high access and quality|quantity, but also high program spending, which has prompted a reassertion of public budgetary control. Newly activist program administration is using various mechanisms to promote economizing. Unable and unwilling to specify standards of public access or quality|quantity too overtly, administration instead seeks to squeeze prices-mainly through administrative price setting but also through competitive bidding and voucherlike arrangements. Under such new incentives, major choices that in many non-American systems would be public are here “reprivatized” to be resolved out of the limelight by beneficiaries, traditional providers, or new intermediaries like Competitive Medical Plans.

Date: 1987
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Persistent link: https://EconPapers.repec.org/RePEc:wly:jpamgt:v:6:y:1987:i:4:p:648-673

DOI: 10.2307/3323521

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