Insurance Rationing versus Public Political Rationing: The Case of the Oregon Health Plan

This article describes the development and evolution of the Oregon experiment with public political rationing in health care. As dissatisfaction with current health care rationing has mounted, the search has accelerated for alternatives to replace the de facto rationing generated by the private health insurance marketplace. As the foremost example of public rationing, the closely-watched Oregon Health Plan is widely offered as an alternative to traditional private health insurance. Other health care rationing alternatives include health maintenance organizations (HMOs) and proposals that encourage self-rationing by individual consumers.     

Self‐interest or Ideology? The Attitude of Norwegian Medical Specialists towards Private Welfare Services

A striking common characteristic in many Western countries at the turn of the millennium is the debate on the role of private actors in public health care systems. Following the long line of Norwegian political scientists paying attention to attitudes towards privatization, this article uses data from 2005 on medical specialists to investigate their preferences for private welfare services, and to uncover the relative role of political ideology and self-interest in affecting their attitudes. So far, few attempts have been made to test in depth the impact of ideology and self-interest as alternative explanations of the attitudes of a professional group toward a policy issue that is important to its interests. The analysis documents the fact that both public and private specialists display scepticism towards leaving welfare services in the hands of private actors. The empirical model for the multivariate analysis builds on the large body of literature on political attitudes, and incorporates variables that are derived from economic and psychological theories in order to test the impact of ideology and subjective self-interest (emphasis on high salary for job satisfaction) and objective self-interest (private economy). In addition, the model also controls for a vector of individual characteristics and professional background. For the group of full-time public specialists, both subjective and objective self-interest, together with ideology, turns out to be the major determinants of view on private welfare services. The attitudes of the private specialists are, on the other hand, not at all affected by self-interest – only by ideology.     

Local government grants and income tax revenue: Redistributive politics in Norway 1900–1990

An important aspect of the welfare state is public provision of private goods, primarily education and health care. In Norway the provision of these services has been organized through the local public sector. The development of the welfare state has to a large extent been the development of welfare communes. The important revenue sources of the local and county governments, grants and income tax revenue, have been controlled nationally, and the paper addresses the determinants of these revenues during 1900–1990. The approach combines a demand model of local public services emphasizing price and income-elasticities with a political economy model of central government ideology and strength. The decision making is understood as bargaining between the government and interest groups, and the political structure consequently is of importance for the policy outcome. The analysis shows how politics matter, and the results indicate that a minority coalition government implies 30% more grant and income tax revenue to local and county governments than one party majority in the long run.     

Privately informed seekers of an uncertain rent

Two departures from antecedent rent-seeking models are invoked: a rent of unknown size is sought, and rent seekers obtain private imperfect estimates of this size. A symmetric equilibrium for a fixed number of rent seekers is characterized, and shown to underdissipate the rent. Then a model of the decision to obtain private information and participate in the rent-seeking contest is built. The symmetric equilibrium participation probability equates expected profit to participation costs. A simple formula for underdissipation results: dissipation is incomplete precisely by the expected aggregate participation costs. If an award mechanism can attain a lower level of dissipation for a fixed number of seekers, then it will raise the endogenous probability of participation, and as a result will dissipate less rent in the equilibrium with an endogenous number of seekers.     

Inefficient households and the mix of government spending

A model is presented in which individuals can vote over government subsidies to a private good and over redistributive taxation. The subsidized good is purchased and shared by couples who act noncooperatively, while possibly being altruistic towards each other. The framework allows a separation of the subsidy policy from redistributive policy. In a majority voting equilibrium the subsidy is used exclusively to correct the individuals' spending pattern. The results suggest that spending on private goods should be an important item in government expenditures when there is strong positive income bias in the political process and/or when household decisions are relatively inefficient.     

The quest for a better performing health system: Public expertise and corporate management recipes in France

Though the government pledged to cut the public deficit from 7.7% of the gross domestic product in 2010 to 3% by 2013, thereby responding to EU Normative power, health expenditures continue to rise, because public demands are higher and more social problems are handled in the health care setting. With French budget deficit threatening France's credit rating, novel instruments were needed. These included corporate management recipes (e.g., pay for performance contracts, patient volume targets, and management by objectives), new compensation mechanisms (e.g., activity‐based accounting and a nationwide scale of health care costs) and far‐reaching laws (e.g., the 2009 HPST bill). Our approach investigates some critical elements of the French health care system. We focus on primary (e.g., family physicians and General Practitioners) and secondary (e.g., hospital and specialty) care. We explore how policies such as the standardization of health services, the regrouping of health policy decisions within the larger Regional Health Agencies, affected citizens' engagement and physicians' autonomy. A French welfare elite pursued a hybrid strategy, regulating quasi‐markets of care providers in a postcompetitive government, while creating supportive conditions for a vibrant private hospital sector. Reforms also emphasized evidenced‐based policy, outputs‐rather than outcome‐measurement, and performance evaluation in a bid to streamline the delivery of health services.     

Recentralization and vertical alignment in the French health‐care system

In foreign exemplars, key new public management (NPM) features such as decentralization and devolution of health‐care responsibilities had outcomes below expectations. Other NPM traits such as the patient as overseer of reforms or the empowerment of patient remained elusive. In France, the integration of public values such as greater participation of patients and local actors (NGOs and elected officials) and NPM‐driven private values such as performance evaluation has yet to be seen. Taking advantage of NPM's failings and austerity agenda, a French welfare elite regained control over health‐care policy decisions at the expense of regions and other local actors. NPM outcomes were below expectations. Austerity cures led to weakening of the regional decision spaces, which can be explained under the principal–agent relationship. Accountability shifted to managerial (the professionalization of hospital managers) and legal (governance via regulations) forms in a bid to restore central government control. A democratic recess results from the lack of public engagement in recent health reforms.     

Public Budget Choices and Private Willingness to Pay

Efficient allocation of public funds depends upon good information about citizens' values. The purpose of this paper is to demonstrate how citizens' values can be obtained by eliciting marginal willingness to tradeoff (MWTTO) ratios for public spending categories and linking these ratios to individual, private willingness to pay. The link enables estimation of the willingness to pay for an expansion to any of the budget categories based on the elicited willingness to pay and the marginal willingness to tradeoff ratios. Tradeoff ratios and willingness to pay are estimated for public budget categories in Kentucky based on a representative sample surveyed by mail and the web in 2007. Estimates show that individuals are willing to pay the most for an expansion to educational services, followed by health care.     

Privatization and bidding in the health-care sector.

Public provision of health care, as under Medicare and Medicaid, traditionally "privatized" major production decisions. Providers of care, largely private physicians and hospitals (but also public hospitals), made significant decisions about public beneficiaries' access to care, the quality and quantity of individual services, and the prices to be paid. The result was high access and quality/quantity, but also high program spending, which has prompted a reassertion of public budgetary control. Newly activist program administration is using various mechanisms to promote economizing. Unable and unwilling to specify standards of public access or quality/quantity too overtly, administration instead seeks to squeeze prices--mainly through administrative price setting but also through competitive bidding and voucherlike arrangements. Under such new incentives, major choices that in many non-American systems would be public are here "reprivatized" to be resolved out of the limelight by beneficiaries, traditional providers, or new intermediaries like Competitive Medical Plans.     

Bargaining Power, Political Transaction Costs and Institutional Change: Private and Public Dental Care in Denmark1

Rational choice institutionalism underexposes institutional change as well as the interaction between institutions at different levels, and this article therefore investigates national and local institutional change. In the Danish dental care sector private and public provision of services have coexisted since the establishment of a publicly financed dental health care system, and the fight between supporters of the two solutions has generated many institutional changes, both nationally and locally. This article analyses all Danish parliamentary proposals and local decisions regarding dental care coverage and provision. The general finding is that increasing pro-public bargaining power seems to promote higher coverage and public provision, while increasing pro-private bargaining power leads to stable coverage and private provision. The institutions do not, however, change whenever bargaining power changes, and national institutional change does not necessarily result in local change. The article explains this in terms of political transaction costs. These costs might also explain why national institutions change more often than local ones, and why local pro-public changes are faster and more frequent than local pro-private changes.     

The issue of instability in a simple policy game between the central bank and a representative union

In the recent economic literature the independence of the central bank is often considered to be one of the most effective guarantees to achieve price stability. A strong theoretical basis for this proposition is that the monetary policy delegation given to an independent central bank is an optimal instrument to avoid the time inconsistency problem of monetary policy. This paper investigates the stability properties of this solution in a simple game in which the private sector (i.e. the trade unions) and the public sector (i.e. the central bank) simultaneously interact. A representative monopoly union is considered, and – in line with the recent economic debate – two types of unions are investigated: (i) the standard micro-founded trade union; (ii) the inflation-averse trade union. In both cases, we find that the requirement for the Nash equilibrium to be stable imposes a limit to the conservativeness of the central bank. Instability of the Nash equilibrium reveals a strategic co-ordination failure between the public and the private sector.     

A shrinking state? Politics,economics and private health care in Thailand

This article explores the political and economic forces involved in the development of privatization policies within the health care sector in Thailand. It is suggested that many of the motivating factors behind private sector growth are outside of the health sector; the general macroeconomic environment and tax incentives have stimulated private sector expansion. Within the Ministry of Public Health a preoccupation with improving care in rural areas and an unclear policy line on the private sector has facilitated this expansion. Only recently has private sector growth come to the policy agenda. During this lag period a number of interest groups have developed. It will be difficult to overcome these entrenched interests in order to change policy direction. Meanwhile, problems of rapid cost inflation and inequity face the Thai health care system. Although this case study focuses upon the health care sector in Thailand it would appear relevant both to other sectors and to other countries. The relationship between development models based upon pro-private, pro-market tenets and the establishment of a satisfactory social policy is questioned.     

Private provision of public goods can be efficient

Economists have long believed that private provision of public goods will be inefficient, though recently some have argued that altruism may mitigate the inefficiencies. Without altruism, agents contribute to the point where marginal cost equals their private marginal benefits. With altruism, they contribute more and hence are closer to the point where marginal cost and total marginal benefits are equated. In an earlier paper (Bagnoli and Lipman, 1989), we showed that private provision need not be inefficient. In a very natural model of private provision without altruism, we showed that the set of (undominated perfect) equilibrium outcomes is identical to the core. Here we consider the effect of altruism on private provision. Altruism essentially creates more public goods because the well-being of others becomes a public good. We show that our model of private provision still has efficient equilibria under a wide variety of circumstances. Interestingly, the equilibria may be inefficient when agents are concerned about the effect of private provision on the distribution of wealth. Intuitively, the game we consider is a very powerful instrument for efficient private provision, but must be supported by other instruments if the set of public goods is expanded too far.We wish to thank Jim Andreoni, Ted Bergstrom, and an anonymous referee for helpful comments and to acknowledge financial support from the National Science Foundation through NSF Grant SES-8520296. Of course, any remaining errors are our responsibility.     

Public policy and health resource distribution

Despite federal health programs of the thirties, the Great Society programs and the establishment of health planning agencies in the sixties, health resources continue to accumulate in wealthier areas. According to a rational decision-making model public resources would be expected therefore to be directed toward those poorer areas with perceived needs. This paper explores the distribution of public and private health resources among towns of Connecticut. Using a rational decision-making model, the distribution of these resources is tested in a series of stepwise regression equations against the socioeconomic and health characteristics of the population. Private allocations of health resources (such as physician distribution) respond to socioeconomic factors while public resources do not show a clear pattern of overcoming the maldistribution effected by private actions. We find little evidence to support the hypothesis that Connecticut's town and state decision makers in health were following a rational model such as is the basis for health planning. Some other more complex model, such as a bureaucratic politics model, would explain better public policy decisions in health resource allocation.Research for this paper was carried out under Department of Health, Education, and Welfare Grant #5-R01-HS-00900. We wish to thank Berton Freedman for assistance with computer programming, and our former Yale Health Policy Project colleagues, George A. Silver, James Warner Bjorkman, and Christa Altenstetter for comments on an earlier draft. This earlier paper entitled Socio-Economic Indicators, Health Resources and Health Status: A Statistical Analysis and its Policy Implications was presented to the Statistics Section, American Public Health Association Meetings, November 16–20, 1975, Chicago, Illinois.     

Public and Private

The problem of public and private is often thought to be a boundary problem. 'Public' and 'private' are said to denote separate areas of human endeavour—distinct 'realms', 'spheres', or 'spaces'. The task of formulating clear boundaries, however, has proven to be enormously complex. It seems that every attempt at conceptualizing a purely private area of activity runs into a particular kind of difficulty, namely, many of the activities characteristic of the private sphere turn out to be activities toward which no responsible public authority could possibly remain indifferent: abuse within the family, collusion in the business world, criminal conspiracy among friends.
It may be, however, that the problem of public and private, conceived as a boundary problem, is thereby misconceived. It would perhaps be better to think of public and private as denoting not primarily—perhaps not at all—separate realms of endeavour but different ways of being in the world, different 'manners of acting'. To act in a private manner is simply different in character from acting in a public manner. Such a formulation, if pursued with care, would allow us to accept fully the arguments of those who would question the very idea of a private realm, while still permitting us to retain a vigorous and compelling public/private distinction.     

Service Personalization as a Response to Noncompliance with Routine Childhood Vaccination

Governmental reaction to citizens’ noncompliance with policy is often portrayed as a retrospective enforcement effort, in which incentives and information serve as the main mechanisms to change citizens’ noncompliant behavior. This study suggests that government may adapt existing policy arrangements to encourage compliance rather than enforce implementation. Such responses recognize that noncompliance is an ongoing decision‐making process rather than a single event, with scope for government intervention at different points. Drawing on toddlers’ nonvaccination in Israel as a test case, findings indicate that to minimize noncompliance and its public health implications, officials have responded by personalizing the standardized service. Personalization is a pragmatic response that recognizes that hesitant parents may be amenable to modified interventions as an alternative to complete exit. Nevertheless, personalization challenges the very notion of a public health intervention based on a standard protocol and raises new dilemmas around where private responsibilities end and public ones begin.     

Interrelationships among public spending preferences: A micro analysis

This paper examines a system of qualitative demand equations for public spending on education, welfare, housing, health, highways, and defense. The demand for public spending for a particular category is hypothesized to be a function of income, tax-price, private benefit measures, and tastes as well as demands for other public expenditure categories. Based on individual survey data, the conditional maximum likelihood estimates of the logit equations are obtained. The results indicate the significant role of tastes, private benefit variables, and tax-prices. In addition, positive rather than negative, demand interrelationships are found to exist. These findings question the validity of the median voter hypothesis as a model for public budget allocation.     

Immigrant parents’ everyday encounters with exclusion and public space mobilities: ‘Some type of force field’

This paper explores everyday feelings of exclusion experienced by Western immigrant parents of preschool aged children in public park playgrounds in Tokyo. These parental feelings of exclusion and unbelonging arose from negative encounters with the majority population where children's visible bodily differences led to unintegrated play. The paper argues that this sense of exclusion is socially problematic as immigrant parents feel negative emotions when using public playgrounds, turn away from local public space mobilities towards online play dates with their countries of origin, and focus more on private home centred play through a style of self-segregation as coping techniques.     

Private Provision of Services and Infrastructure – An Expanding Industry of the Nineties

A conference devoted to the public sector a decade ago is unlikely to have paid any attention to the private provision of public services and infrastructure, as at that stage such activities had had very little impact on the operations of governments in Australia. This article argues that private provision is an important emerging element of public sector service delivery.While generally supportive of such developments, the article presents reasons why governments have increasingly turned to private provision including the benefits involved, but also raises potential management and accountability considerations.