Purchasers and Providers

David Reisman

Chapter 8 in The Political Economy of Health Care, 1993, pp 141-160 from Palgrave Macmillan

Abstract: Abstract As insurance cover has spread and individual payment has declined, so primary responsibility for the purchase of provision has increasingly shifted from the insured patient to the insuring agency. Those observers who believe that the powerful organisation is far better placed to rise to the challenge of cost-control than is the isolated actor will regard this decay in direct involvement with some concern: the more the individual has to pay, such observers will argue, the less the opportunity and the incentive for the insurer to press for economy and efficacy in the provision of care. While the specific hypothesis will be controversial, that any move towards improved cost-control through increased cost-sharing is likely to prove counter-productive, much less controversial will be the general proposition, that it is in the nature of the insuring agency that it should strive to moderate pressures on scarce resources. A State sector insuring agency can support more care for more citizens if it forestalls unnecessary treatment and insists on value for money. A private sector insuring agency is better placed to keep its premiums competitive and its services generous if it promotes medical productivity and refuses inflated claims. Nationalised or commercial, the insuring agency is very frequently the cost-container’s best friend.

Keywords: Private Sector; National Health Service; Average Cost; Health Maintenance Organisation; Inpatient Stay (search for similar items in EconPapers)
Date: 1993
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DOI: 10.1057/9780230378308_8

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