The health services are not like other services. Not because they are so exceptional in nature, but because the health market functions poorly.
Photo: Einar Nilsen
«The Health Services Initiative has given voice to the frustration which is widespread among health personnel, but may help to bring about more of the things that we want least of all», Steinar Westin recently wrote in Aftenposten (1). The Health Services Initiative interpreted Westin as saying that they supported certain political parties, and in responses published in VG as well as Aftenposten, they made it clear that they were independent of party politics, claiming that none of the major parties had presented any good solutions (2, 3): «The Health Services Initiative represents the other road, health services in which care for patients and professional values are at the centre. We demand a new health policy from all parties.»
The Health Services Initiative claims that operational models derived from manufacturing industries are unsuitable for health care and nursing, that hospitals and nursing homes ought to have room for all those who need it, and that the professionals should be left to do their job and not spend their working hours on costly and meaningless bureaucracy (2). It is easy to agree to all this. But how should we achieve it? One is sort of left with the impression that if only enough funds are granted, and the cheque is sent to the professional communities, the rest will take care of itself. However, this is not so.
What are professional values, and which professionals should decide what is meant by correct spending of funds? Opinions are divided on this issue. In most professional communities, there is major disagreement on even fairly simple and straightforward issues, cf. the recent debate on the pages of this journal regarding the correct use of antibiotics. An even larger discussion is likely to ensue when groups of patients must be weighed against each other. Moreover, coming to agreement on ethical values is extremely difficult, for example whether it is more correct to provide maximum services to the patient at hand and forget those patients who are out of sight than to distribute the available resources among more patients, even though this would mean curtailing the services provided to each individual patient.
To pretend that there are no limits to the resources or that it is possible to allocate oneself out of all dilemmas is to bury one’s head in the sand. A significant reason for this is that the health services are not like other services. Not because the services are so exceptional in nature, but because the health market functions poorly.
Simply put, the market mindset functions poorly for the health services as a whole, but may work excellently for a number of individual services. Those of us (and there are many of us) who have ever made use of private health services are fully aware of how well these may function. We are willing to pay for them, because they are good enough and more available than the public services we can enjoy nearly free of charge. When I need a consultation with my GP, a gynaecological examination, hip surgery, a period in a psychiatric institution, home care services or sophisticated and costly cancer treatment for that matter, I have no compunction about regarding these as services that I would consider purchasing.
In other words, the problem is not the nature of the services, but rather the fact that the market mechanisms fail to function. There are multiple reasons for this, but in very simple terms, the cause is as follows: A well-functioning market requires information symmetry, i.e. the provider and the purchaser must possess approximately the same knowledge. In order to determine what a reasonable price should be, the customer must be fairly certain of what he or she is buying. In the health services, this condition is far from being met: health personnel – and doctors in particular – have far more information than their patients with regard to diagnostic and therapeutic services. Moreover, those who purchase the service in question (the patients) are in no way guaranteed to achieve a certain outcome. Nor does the patient choose to fall ill, and will thus be trapped in a dependency relationship to those who provide health services. Thereby, the «market» is to a great extent ruled by the providers – meaning health personnel. We refer to this as supply-driven demand. And finally, since the bill is normally picked up by a third party – in Norway: by the government – there are few incentives among the providers (the doctors) or among the customers (the patients) to keep prices down. This is a key reason why the accelerating cost levels in the health services are so hard to rein in. Nor would a completely free market be able to satisfy a number of other important concerns and wishes, for example an equitable distribution. Various forms of regulations could address this issue, however.
«The politicians must assume the responsibility for defining frameworks for the health services,» The Health Services Initiative states on its website. Yes, of course. But frameworks go beyond the size of financial grants. They include municipal boundaries, transport policy, labour-market policy of course, and much else besides. To throw this into a somewhat sharper relief: the quickest and most efficient way to liberate resources for treatment of patients is to take from the funds devoted to the healthy (i.e. wages for health personnel) and spend them on those who are ill.
The largest challenge by far in health policy is to gain control over the hike in public costs without having to restrict the provision of services. There are fundamentally two ways to approach this: (even) tougher management of the supply, or (partial) privatisation of the payment. This is what Steinar Westin has in mind when he says that in the upcoming elections we are standing at a crossroads (1). None of the roads are comfortable, and none of the roads are ideal, but a choice has to be made. If you choose not to take a stand, you give your vote to your least preferred alternative, because medical activity is not politically neutral.