ABSTRACT
PIP: Most of Brazil's medical and hospital services are delivered through the private sector but are paid for by the government through the National Institute of Medical Care and Social Security (INMAPS). During 1981 and 1982, INMAPS took a number of measures designed to cut costs and improve operation of this system. It has also introduced a number of changes since 1983 directed at cost control. Still, it appears that health costs in Brazil are frequently higher than those in developed countries. This problem has gone hand in hand with substantial expenditures on high technology services that are frequently not needed or that are very costly and benefit relatively few patients. In seeking to confront and ameliorate these problems, what is needed is development of a system or environment that will encourage a more socially efficient use of health services. In this regard it is important to recall that creation of such a system requires a more effective use of prices as signals to physicians, who are the system's decision-makers.^ieng