Decision making in quasi-markets: a pedagogic analysis.

The objective of the 1991 NHS reforms was to reduce "excessive" vertical integration by constructing a quasi-market in which incentive structures and increased availability of information would enable decision makers make better use of resources. There is, however, no overall framework in which to consider the welfare gains which result from the introduction of a quasi-market or the welfare losses which arise from distortions in a quasi-market. This paper offers an analysis which can be applied to illustrate the difficulty of estimating the welfare loss from cream skimming and also to consider the impact of local monopoly.

National Health Service waiting lists. A discussion of competing explanations and a policy proposal.

A discussion of the main arguments advanced to explain waiting lists in Britain's National Health Service (NHS) is presented in a framework which focuses upon 'demand' and 'supplier induced demand' considerations. The difficulties associated with determining an optimum waiting list are explicitly emphasised. Hence it is in the context of an alleged requirement to reduce numbers waiting that the proposal to offer a price subsidy for private medical care is appraised. Such a policy is compared with that of direct expansion of expenditure on the NHS. Attention is drawn to the second round effects of 'supplier induced demand' which may be associated with these policies.

French health care: viewpoint A--system X?

This article outlines and applies a framework for comparing health care systems put forward by Culyer et al. (A New Approach to the Economics of Health Care (Olsen, M., ed.). 1982, pp. 131-150, American Enterprise Institute, Washington-London). Systems are differentiated by their objectives, finance, ownership, degree of government involvement and reward mechanisms. System X is essentially the market model whereas system Y is the state version of health care provision. Two basic objectives are pursued in the paper. First to describe and analyse the French health care system with the aid of this taxonomy. Second to test the hypothesis advanced by Culyer et al. that countries with one system tend to adopt elements of the opposite system in response to policy difficulties. The evidence presented is inconsistent with the suggestion that French health care is clearly in the system X mould as it contains significant elements of both systems. However, it is suggested that reform responses have taken the French system further towards a system Y stereotype. This observation is consistent with the description of the evolution of health care discussed by Mechanic (Milbank Memorial Fund Quarterly, 55 (1977) 61-78.

Met and unmet demand for hospital beds. Some recent evidence.

Many commentators have noted the interrelation of demand and supply of hospital beds and have suggested that an increase in the supply of hospital beds tends to generate additional demand either in the form of more patients admitted or patients treated for longer periods of time or some combination of the two. We can report that the bed use rate can be predicted more accurately in terms of the five-seventh rule, that is if a National Health Service bed is made available for an additional week, then for five out of seven days it will be occupied. This rule was found to apply at both regional and district level. Variation in admission rates was also investigated and it was found that a large proportion of the observed variation could be explained in terms of one variable--bed supply. In view of the Resource Allocation Working Party's proposals, the relationship between the overall standardized mortality ratio and bed supply, admissions rate and bed use rate was investigated. No significant effect, however, was discovered. In other words, it is bed supply which strongly influences the demand for hospital care and not the overall standardized mortality ratio.