The Current Move towards Competition and Choice in Health Care in Terms of Efficiency - Essay Example

ASSESS THE CURRENT MOVE TOWARDS COMPETITION AND CHOICE IN HEALTH CARE IN TERMS OF THE EFFICIENCY VS. EQUITY TRADEOFF by of the Class Name of the Professor Name of the School City, State 23 March 2013 Introduction Choice and competition are among the fundamental models of health service delivery that of recently, are being adopted by most countries for their important role of meeting the demand existing in the modern healthcare system. It has been a key concern for policy makers to promote choice and competition, so as to increase productivity and responsiveness to consumers in healthcare. The western countries in Europe and the United States have embarked on renovating their healthcare services, to allow patient choice through availing price competition between the health care providers that customers can choose from. In the past, healthcare service had been a government dominated area, and in most developing countries it enjoyed a monopolistic position, with ability to provide a variety of services and capture the customer surplus in the market. However, today there are many private organizations that venture in the healthcare service as hospitals and pharmaceuticals, which are highly relying on modern technology to offer the customers quality service. As a result, this has made the cost, quality, and healthcare accessibility a legislative and policy issue that ought to be managed, due to the rising variation. The economic benefit of promoting competition and choice is to enhance competition pressure, so that private firms become more efficient, causing them to reduce costs of service and improve their services and products as a way of attracting clients, which is generally healthy and an improvement of the economy (Propper, 2010). New forms of health care financing and delivery have developed as a result of the competitive pressure for cost containment, to slow health care inflation and encourage clients to choose from the available relatively lower cost health care. Hospitals and physicians have been each forming mergers and joint ventures with their partners in the healthcare industry, hence influencing costs and bargaining power as they improve the quality of health care and its distribution to ensure equity in the society (Federal trade commission, 2004). Competition, Patient Choice, and Equity In health care, improving patient and user choices are perceived different in accomplishment of healthcare systems objectives. However, it has become a key concern for most nations so that they get to direct their future in health and public services in regard to patients wants. According to Fotaki, offering patient choice in England is viewed as an attempt to address the failure of the pre-existing policies that had been operational in providing equitable and high quality services to the population, while it is perceived as a way to achieve other desirable goals, for example reducing the waiting lists, hence not an explicit policy objective on its own merit (2007). There are numerous patient choice policies being developed in health care industries, but how efficient and effective they will be will depend on the adjustments they would have made from the past policies, and how attractive it would be to the customers in the already competitive market. The transition made so far is that the patient or user choice policies are been made based on the learned experiences in the previous policies. The health systems of most developing and developed countries are still been challenged in responding to the needs of the less privileged members of the society; therefore creating inequality when it comes to choice in healthcare and its delivery. Although the mergers and consolidation of health facilities and physicians have improved, it does not mean that the service being provided to some people, especially in the marginalized areas are similar to those being delivered in urban parts. The networks being formed have been effective to ensure equitable health outcomes, but the efficiency in health systems has been compromised. Comparing two nations like USA and India, one realizes that the with sufficient government input into the heath care like in US that recently passed a health care bill, equity in delivery of the service is promoted to all individuals, despite of their low level of income. In India, access to healthcare has been improving, but the inequalities based on the socioeconomic status, gender, and geographical locations remains strong, due to the high out of pocket expenditures burdening the household, which affects their choice that comes with inefficient health gains (Balarajan, Selvaraj, and Subramanian, 2011). Of late choice and competition in health care is being perceived by the upper and middle class as a way to incentivize efficiency, but as a positive aspect, it is promoting equity in health care distribution by improving the care delivered to the underserved and less fortunate users. By embracing the quasi market system, choices often reserved only for the people who can afford private care can be extended to the less well off, hence being of benefit to everyone (Grand, 2009). For a long time, high socioeconomic status individuals have had an advantage in accessing privileged care, but with the concept of choice, the less well equipped have got the chance to be assisted in getting the most from a public service scheme. Competition and Choice Influence on Efficiency The public delivery arising from the state owned and operated health care facilities has had a poor record in performance, providing low quality care that has been inefficient in most cases, right from the allocation of resources to the responsiveness of the needs of the people. The development of private and non-profit health care organizations has been increasing competition and choice to the general society, while promoting efficiency and effectiveness in service delivery. Critically, there are those who view the accepted quasi market as invoking in-genuine competition, a way to limit provision of information that guides customers to making informed choices, and causing the problem of service providers’ selection of patients to treat (Grand, 2009). Although the barriers to entry in the health care industry are blocking a variety of potential competitors and patients’ choice, the competition put forward by the private organizations has been raising the bar for treatment in their institutions, for the quality service they provide. With state owned health care services, equity has been given priority over efficiency, but with the private organizations, competition makes them to differentiate in services, such that they enjoy the higher demand of their services from specific groupings of people in the society. In terms of efficiency and affordability, the private organizations are having a competitive advantage over the state owned public institutions, because the quality of service being offered in private ones has been efficient and seems to be line with the cost. Through the competition and choices, one realizes that the higher income earners prefer the private health service, while the low income earners remain to be served in the government health facilities. Not because they prefer so, but because it’s what they can access easily with respect to the costs and affordability. Recently, there have been cases of health care cream skimming, arising from competition and differentiation of services. First of all it could be quite difficult to measure the efficiency of different hospitals or health care when product and service differentiation is the common trend in the competition. This is because some institutions are planned only to deliver a specific service (such as dental care), which obviously makes them to specialize and improve in the only field. However, customers can judge efficiency or quality of the service through the experiences of the same product or service from different institutions. Diseases have increased and the people seem to have taken for granted certain measures to prevent them from contracting some acute and chronic diseases. As a result, a large number of the western population the world are suffering from diseases, such as diabetes and cardiovascular diseases among others, which can be prevented early in time. According to the OECD, some cases of avoidable of hospital admissions when dealing with diabetes have been realized, due to the increasing number of patients and failure of effectively controlling and managing the disease (2012). Most of the operating health organizations are business entities and when the clients have very high cost demanding illnesses, the service providers tend to escape the obligation by failing to admit the patients, which expresses the existing cream skimming in health care industry. Some of the peculiarities in health care that have been neglected in setting the health care policies are issues of human behavior in consumption and lifestyle, which are important in health care planning. Therefore, achieving efficiency has to be a combined effort right from production, patient consumption, financial allocation, to quality health service effective for the patient’s treatment. Conclusion Efficiency and equity have always had a conflict in health care delivery and distribution. Competition and choice have a role to play in establishing efficient or better quality services at a manageable cost for the customers, if at all health care businesses and organizations have be firm in operation. Such tradeoffs between efficiency and equity are not necessarily, but practically increasing the performance of the health care system along any of the dimension would result in compromising the other. For public healthcare facilities with known poor performance, the first move to rectify the situation would be trying to allocate relatively enough resources to match up to the required performance in health care delivery. The public also need to be adequately informed about most health care services, so that they depend on reliable information about the existing prices and quality, to obtain the goods and services they desire. So far the governments have been active to play their parts to increase efficiency and equity, which is evident from the states increase in health care spending. Reference List Balarajan, Y., Selvaraj, S., and Subramanian, S. V., 2011. Health Care and Equity in India. [online]Available at: http://www.ncbi.nlm.nih.gov/pmc/articles/PMC3093249/ [Accessed 22 March 2013] Federal Trade Commission. 2004. Improving Healthcare: A Dose of Competition. [online] Available at: http://www.ftc.gov/reports/healthcare/040723healthcarerpt.pdf [Accessed 22 March 2013] Fotaki, M., 2007. Patient Choice in Healthcare in England and Sweden: From Quasi-Market and Back to Market? A Comparative Analysis of Failure in Unlearning. Public Administration 85(4): 1059-1075. Grand, J. L. (2009). Choice and competition in publicly funded health care. Health Economics, Policy and Law 4(4): 479-488. OECD. 2012. OECD Health at a Glance Europe 2012. Paris: OECD Publishing. Proper, C., 2010. The operation of Choice and Competition in Healthcare. [online] Available at: http://clients.squareeye.net/uploads/2020/documents/0920TWE_ESRC_healthcare_050730%20C.pdf [Accessed 22 March 2013] Read More