Health policy is one of the most debated and analysed areas of social policy internationally, and encompasses a multitude of seemingly disparate but in fact largely interrelated issues. For example, how should we motivate doctors to improve performance? What is ‘performance’, and how do we measure it? What is the impact of antitrust law on provider behaviour? How do we ensure that we attain the most benefit from our health care resources? What is ‘benefit’, why is it defined in the ways that it is, and how do we measure it? Can the implementation of World Trade Organization regulations produce legislation that favours public sector health care development?

Ten years ago, it would have been hard to imagine the publication of an issue of a scholarly journal dedicated to applying lessons from the transformation of the United States Department of Veterans Affairs Health System to the renewal of other countries' national health systems. Yet, with the recent publication of a dedicated edition of the Canadian journal Healthcare Papers (2005), this actually happened. Veterans Affairs health care also has been similarly lauded this past year in the lay press, being described as ‘the best care anywhere’ in the Washington Monthly, and described as ‘top-notch healthcare’ in US News and World Report's annual health care issue enumerating the ‘Top 100 Hospitals’ in the United States (Longman, 2005; Gearon, 2005).

We test whether individual health status is related to area-level social capital measured by rates of voting participation in municipal political elections, controlling for personal characteristics, where health status is measured by mapping responses to interview survey questions into the generic health-related quality of life measure (HRQoL) the EQ-5D in order to derive the health state scores. The analysis is based on unbalanced panel data from Statistic Sweden's Survey of Living Conditions (the ULF survey) and a 3-level multilevel regression analysis, where level 1 consists of a total of 31,585 observations for 24,419 individuals at level 2 nested within 275 Swedish municipalities at level 3. We find that the health state scores increase significantly with municipality election rates. This result is robust to a number of measurement and specification issues explored in a sensitivity analysis. However, almost all variation in health status exists across individuals (more than 98%), which demonstrates that even if social capital (and other contextual variables) may be significant it is of less importance, at least at the municipality level in Sweden.

This paper examines the interaction between public and private insurance in the context of the US Medicare program, which serves those aged 65 and older as well as the disabled who meet specific eligibility requirements. Specifically, the paper examines the extent to which increasing enrollment in Medicare managed care (which provides more comprehensive coverage than basic Medicare) influences premiums in the privately purchased Medicare supplemental insurance market (called ‘Medigap’). We employ a fixed effects instrumental variables approach to analyze the association between premiums charged by two large Medigap insurers and Medicare HMO penetration rates, examining over 60 geographic areas during the period 1994–2000. It is hypothesized that greater Medicare HMO penetration will lead to adverse selection into the Medigap market, resulting in higher premiums. The findings suggest a moderate upward effect on premiums, with elasticities ranging from 0.09 to 0.25. Controlling for other factors, moving from a 12% to a 22% Medicare HMO penetration rate would raise average Medigap premiums from $1,314 to $1,615. We discuss the implications of these results with respect to the design of national health care systems that include both public and private insurers.

Globalization is a key challenge facing health policy-makers. A significant aspect of this is trade in health services. However, little is currently known about how trade in health services will affect the health of populations and national economies. A key determinant of the impact of trade in health services will be the general economic and trade context of the country concerned. One specific aspect of this is the ‘openness’ of a country’s health sector to trade; yet there is little, if anything, currently known about the most appropriate methods to assess openness of the health sector.

In this article we perform an economic analysis of different regulatory frameworks that aim at guaranteeing solidarity in competitive health insurance markets. Thereafter, we analyse the legal conformity of these intervention strategies with EC law. We find that risk compensation schemes are the first-best intervention strategy because they guarantee an ‘acceptable level of solidarity’ without hindering free trade and competition and without reducing efficiency. Second-best options are premium and excess-loss compensation schemes, which guarantee solidarity at the expense of some efficiency. Premium rate restrictions and open enrolment should be avoided because they reduce efficiency and are unnecessary, not proportional, and undesirable to the pursuit of the general good. These conclusions are relevant for EU countries that adopt premium rate restrictions and open enrolment in combination with a risk compensation scheme, such as Ireland and the Netherlands. In these countries policy makers should design the health insurance schemes in conformity with EC law, for example by replacing premium rate restrictions and open enrolment with premium and/or excess-loss compensation schemes.

Although decentralization has been widely implemented in health systems, there is little agreement as to how it should be defined or the outcomes it should produce. This article develops a functional typology based on political, administrative, and fiscal dimensions of decentralization. It utilizes these three categories to identify and highlight key theoretical issues concerning decentralization, emphasizing the likely advantages and disadvantages that decentralization can be expected to generate. It then examines the usefulness of this functional framework in explaining recent policy-making decisions within a number of tax-based health systems in Western Europe. The article concludes by suggesting that this three-part typology can be helpful to both policy makers and academics in evaluating the effectiveness of decentralization as a policy mechanism within health care systems.

The Labour Government elected in 1997 faced similar problems in health care to those faced by the Conservative Government in schools in the early 1990s. And the policies developed for health care in the late 1990s echoed those that had been implemented for schools. This paper considers one of those common policies, namely the creation of new central inspectorates required to visit all organizations over a four-year period: the Office for Standards in Education (OFSTED) to inspect the quality of teaching in schools, and the Commission for Health Improvement (CHI) to review the implementation of the systems and processes of clinical governance in every organization in the National Health Service (NHS). At its creation, CHI was described as an OFSTED for the NHS. This paper compares these two inspectorates; describes origins of policies and institutions; considers their rhetoric and practices; describes the processes the two organizations used and considers their impacts. It argues that structural differences meant that CHI could never have been an OFSTED for the NHS; relational distance is a key aspect of inspection/regulation; and that the key to effective regulation in the case of the NHS was the relational proximity between CHI and the NHS, with the added weight of a strong performance management regime.

Following a decade in which Medicare operated as the leading ‘change agent’ within the US health care system, the private sector rose to the fore in the mid 1990s. The failure of President Clinton's attempt at comprehensive, public sector-led reform left managed care as the solution for cost control. And for a period it worked, largely because managed care organizations were able to both squeeze payments to selective networks of medical providers and significantly reduce inpatient hospital stays. There was a lot of ‘fat’ in the nation's convoluted health care system that could be (and was) eliminated through competitive negotiations between medical providers and insurers, employers, or managed care organizations. One of our primary arguments in this article is that managed care operated partly as a systematic suppression of price discrimination or differential pricing (often referred to as ‘cost shifting’), as managed care organizations qua purchasing agents prevented hospitals and physicians from summarily raising prices to private payers to meet their financial requirements. Over time, however, managed care fell victim to inflated expectations, its own initial success, and larger fiscal forces. During this same period, Republicans and Democrats struggled to reach a consensus over the future direction of Medicare. Their disagreements contributed to the impasse over budget policy in 1995 and the infamous partial federal government shutdown. After President Clinton's reelection in 1996, partisan disagreements over Medicare dissipated. And, in 1997, Congress and the president passed the Balanced Budget Act of 1997, which emerged as a massive piece of patchwork legislation that sought to balance the federal budget, rein in Medicare spending, and increase the number of the programme's beneficiaries in private health plans.

There is a popular belief that drug launch is delayed in developing countries like India because of delayed transfer of technology due to a ‘post-launch’ imitation threat through weak intellectual property rights (IPR). In fact, this belief has been a major reason for the imposition of the Trade Related Intellectual Property Rights regime under the WTO. This construct undermines the fact that in countries like India, with high reverse engineering capabilities, imitation can occur even before the formal technology transfer, and fails to recognize the first mover advantage in pharmaceutical markets. This paper argues that the first mover advantage is important and will vary across therapeutic areas, especially in developing countries with diverse levels of patient enlightenment and quality awareness. We construct a game theoretic model of incomplete information to examine the delay in drug launch in terms of costs and benefits of first move, assumed to be primarily a function of the therapeutic area of the new drug. Our model shows that drug launch will be delayed only for external (infective/communicable) diseases, while drugs for internal, non-communicable diseases (accounting for the overwhelming majority of new drug discovery) will be launched without delay.

This article provides a critical analysis of the introduction of hospital choice in Denmark and Norway. The two Nordic cases provide evidence from public integrated health systems that may be compared to the current implementation of choice in other countries such as England. We use the theoretical concepts of institutional structure, historical legacies, and situational factors to analyze the translation of the general choice idea into a specific health policy design in Denmark and Norway. The results of the study show that even if there are many similarities between the two countries, there are also significant differences. In Denmark the initial implementation of choice was adjusted to the dominant policy objectives of macroeconomic control through regional planning, while in Norway the chosen solution reflects a more limited concern for expenditure control and a greater willingness to experiment. Timing and differences in the relative strength of the decentralized actors are important explanatory factors. Theoretically, this article provides some insights into the problem of introducing policies that contradict existing traditions, norms, and values. It addresses issues of policy design and the relationship between ideas, historically developed institutions, and situational factors, including actor constellations and interests.

Despite its obvious appeal, the concept of public involvement is poorly defined and its rationale and objectives are rarely specified when applied to current health policy contexts. This paper explores some of the underlying concepts, definitions, and issues underpinning public involvement policies and proposes a set of criteria and questions that need to be addressed to allow for the evaluation of public involvement strategies and their impact on the health policy process. It aims to further our understanding of the role that public involvement may play in contributing to health systems that are responsive to the needs and priorities of the public, and, ultimately, providing better health and health care services to the community at large.

There has been much recent interest in the trade in human organs in India. This paper examines both the extent to which regulatory controls through the Transplantation of Human Organs Act (1994) are effective in curbing commercialization and the nature of the constraints on the effective implementation of this Act. The study, a politico-economic analysis of health sector regulation, is based on a stakeholder analysis drawing on the views of key decision makers, service providers, organ donors and recipients. The findings indicate widespread acknowledgement of an organs trade and highlight four major constraints on the effective implementation of the Act: the commercial interests of middlemen and service providers, the ambiguities and loopholes in the Act; the low monitoring capacity of the regulatory authorities, and the pressures and responsibilities exerted upon the Authorizing Committees. A feature of the Act is that its implementation is subject to a major incentive compatibility constraint – it is seemingly not in the interests of any of the key players, including the regulatory authorities, to restrict the organ trade. To some extent, this institutional problem is created by the specific nature of the regulatory intervention, and, as a consequence, measures involving straightforward redrafting of the regulation might go some way to addressing this incentive problem. Another solution may entail a ‘harm-reduction’ strategy involving a controlled trade where procurement and organ matching is carried out by a government agency (this would require, however, the prior resolution of the broader ethical question concerning the legitimacy of such trade).

A current policy issue is whether, and if so under what circumstances, insurance companies should be given access to genetic test results. The insurance industry argues for mandatory disclosure in order to avoid problems of adverse selection; an alternative would be a moratorium or legislation preventing such disclosure; a third option a voluntary disclosure law. This paper investigates the impact of these policies on individuals' incentives to both acquire genetic information and to disclose it to providers of health and/or life insurance. The theoretical framework used to inform this analysis is provided by the ‘games of persuasion’ literature, in which one agent tries to influence another agent's decision by selectively withholding her private information regarding quality. The application of the theoretical framework to this policy context yields the following results. Individuals have the incentive to acquire genetic information and to disclose the test results if disclosure is voluntary. If, however, they are obliged to disclose the results of any genetic tests they have taken, their incentive may be not to acquire such information. I discuss the policy implications of these findings both from the point of view of the insurance industry and from a public health perspective.

Since 1995, the Veterans Health Administration (VHA) has had an ongoing process of systems improvement that has led to dramatic improvement in the quality of care delivered. A major component of the redesign of the VHA has been the creation of a fully developed enterprise-wide Electronic Health Record (EHR). VHA’s Health Information Technology was developed in a collaborative fashion between local clinical champions and central software engineers. Successful national EHR implementation was achieved by 1999, since when the VHA has been able to increase its productivity by nearly 6 per cent per year.

After a long period of neglect, the issue of human resources for health (HRH) has recently emerged as a core component on the international health agenda, with policy makers increasingly eager to learn from experience elsewhere. This article investigates systematically the opportunities and challenges associated with the use of cross-national comparisons of HRH policies and practices. It reviews the evidence in favour of using international comparative studies on HRH, discusses emerging opportunities for developing a cross-national research agenda to guide HRH policies in Europe, and highlights obstacles which may hinder the implementation of comparative studies on HRH. While demonstrating many opportunities offered by the comparative approach to improve understanding of human resources processes in the health sector, this article also emphasizes the dangers of simplistic pleas for the transfer of human resource policies without taking into account the context-specific factors and the generative capacity of the social actors in the design and implementation of policy changes.

Privatizations of public services are often driven by economic scarcity and changes in political leadership, in particular election victories for conservative or neoliberal political parties. Data from Norwegian counties on numbers of medical specialists in secondary care over a period of 11 years (1991–2001) allow us to analyse effects of economic, socioeconomic, and political factors on supply of both public and private specialists and the private–public mix. We find striking variations between the main explanatory factors related to public and private supply. Supply of public specialists is explained by counties' revenue levels and demographic factors and is not affected by the party composition of councils. The supply of private specialist medical services is negatively related to the proportion of elderly patients. The scarcity hypothesis is confirmed as lower county revenue levels increase both the absolute and relative proportions of private supply. Political composition of councils affects the private proportion of medical specialists as increased representation of conservatives leads to privatization.

Many advocates of policy to implement the findings of research on the multiple determinants of health accord scant attention to the determinants of health policy in democratic countries. The principle determinants of the allocation of scarce resources to improving health include: the priorities of voters; the diffusion of responsibility for improving health; the absence of evidence about matters of consequence to policy makers; the arraying of some evidence in ways that frustrate policy making; resistance to addressing determinants other than clinical services and traditional public health practices among many professionals in these fields, as well as by industries that supply the health sector; and the special political influence of persons who suffer serious chronic disease and of members of their families.