Structural adjustment with a human face — a comment on Adelman and Taylor

Development Strategy in Thailand. By Robert J. Muscat. The Pall Mall Press Ltd. 1966. Pp. xvi, 310. 105/‐.

Planning Without Facts: Lessons in Resource Allocation from Nigeria's Development. By Wolfgang F. Stolper. Harvard University Press &; Oxford University Press: London. 1967. Pp. xx, 321. Appendix. Index 64/‐.

Pan‐Africanism and East African Integration. By Joseph S. Nye, Jr. Harvard University Press, Cambridge, Massachusetts, and Oxford University Press, London and Nairobi. 1966. Pp. x, 307. Index. 45/‐.

International Aid to Thailand. The New Colonialism? By Ronald C. Nairn. Yale University Press: New Haven and London. 1966. Pp. 223. Index. 48/‐.     

Financial Development and Poverty Reduction: Can There be a Benefit without a Cost?

This article investigates how financial development helps to reduce poverty directly through a distributional effect, beyond its indirect effect through economic growth. The results obtained with data for a sample of developing countries from 1966 through 2000 suggest that the poor benefit from the ability of the banking system to facilitate transactions and provide savings opportunities (through the McKinnon ‘conduit effect’) but to some extent fail to reap the benefit from greater availability of credit. Moreover, financial development is accompanied by financial instability, which is particularly detrimental to the poor. Nevertheless, the benefits of financial development for the poor outweigh the cost.     

Case-mix nursing home reimbursement: a technical “fix” for a policy inadequacy?

Most state Medicaid programs, in many cases the largest fundors of long term care, reimburse nursing homes or home health agencies on negotiated flat rates. However, several states have implemented or are planning to use reimbursement methods using case-mix indices to adjust for the different variable costs (e.g., resource utilization groups, RUGs) incurred in caring for different types of patients. Advocates contend that such methods can simultaneously help contain costs and enhance access by motivating the nursing home to keep costs below predetermined rates and mitigating providers’ reluctance to admit “heavy care” residents. The numbers of such residents putatively have increased as a result of incentives in the Prospective Payment System for hospitals to more quickly discharge sicker patients. However, the potentially negative effects of case-mix reimbursement (CMR) on quality of care have not gone unnoticed, and the costs (as yet undetermined) of mechanisms to avert these effects likely are nontrivial.

This paper examines the effects of CMR on cost (to states and nursing homes), access and quality. A preliminary review of the available evidence seems to indicate mixed results; yet, CMR obviously appeals to some Medicaid programs and representatives of the nursing home industry. We suggest that the allure of CMR may be due to a mistaken belief that, to borrow from Brandon (1990), such “tech fixes” obviate irksome negotiation on the part of policy elites.

An alternate reimbursement policy is proposed: a negotiated prepayment, based on a facility's global budget, with periodic allocations and an end of period adjustment to compensate the provider for unanticipated costs.