The Market and Health Care Production

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The importance of health care to the economy and society, and its rising cost, mean that governments are constantly searching for ways to increase productivity and promote innovation. The use of market mechanisms in health care is a key component of current reforms to health care delivery in many countries. The political appeal is simple: competition fosters productivity in the rest of the economy, so it will in health care too. But the evidence base is mixed, limited and comes predominantly from the USA, which is an outlier compared to most other health care systems.At the same time as the greater use of market mechanisms has been promoted, from other quarters have come calls for greater integration in health care delivery and doubts raised about whether competition can deliver the step changes required. In the UK at present, for example, there is vociferous opposition to the greater use of market forces in the Coalition government's Health and Social Care Bill. In the USA, Obama's Affordable Care Act includes proposals for greater integration between health care providers and insurers.All these factors mean that understanding the applicability of, and the limits to, market forces in health care is of highest priority. The over-arching question I seek to answer is under what conditions will the greater use of market mechanisms be beneficial for the users and payors of health care services.Within this over-arching question I will address two broad questions: How strong is the support for the use of competition and choice in health care and what evidence is there that integrated care models or command and control can do better? How do market forces affect the labour market and the behaviour of health workers? Within these broad questions, I will address a range of specific issues. These include whether price regulation is needed to make competition in health care work; the role of information in increasing quality; whether choice of family doctors improves their quality; the extent to which production should be concentrated into high volume units, and whether pay structures for managers of public hospitals reward good performance and good management and how not-for-profit hospital behave when faced with competition compared to for-profits.These issues are all central to understanding how health care is best produced. Our present knowledge is partial and this limits the policy makers in their search for solutions that will improve the efficiency of the health care sector. My research agenda will be coupled with a strong impact agenda to translate and disseminate these, and the findings of other scholars, to inform the development of better policy. I have a long track record of active engagement with policy makers and industry participants: this fellowship will give me the opportunity to spend more time ensuring that research findings have maximum impact.