Knowledge, Technology and Changing Health Care Organization:
Challenges & Converging Approaches in Modern Nations
David Mechanic, Ph.D.
Rutgers, the State University
Institute for Health, Health Care Policy and Aging Research
30 College Avenue
New Brunswick, NJ 08901-1293
Phone: (732) 932-8415; Fax: (732) 932-1253; Email: mechanic@rci.rutgers.edu
Knowledge, Technology and Changing Health Care Organization:
Challenges & Converging Approaches in Modern Nations
A global economy, advances in biomedical science and technology and demographic changes all pose
common challenges to modern nations planning for their futures. [Slide 1]
Health science and scientific medical
care are part of an international economy and worldwide medical culture increasingly made more cohesive by the
accessibility and simplicity of mass communications that have revolutionized information acquisition. Educated
populations in nations throughout the world readily learn of medical possibilities whether or not they or their nations
can afford them. It is difficult to deny aspirations in matters affecting health and life itself, and this issue is the core
of the dilemma facing not only developing nations but even the most advanced and richest nations of the world.
Whether it be the provision of useful drugs to HIV positive pregnant women in South Africa or transplanted organs
in more affluent nations, we all face the realities of economic constraints.
Medical care is more than ever a world system not only in biomedical science and communication, but also
in the ways in which medical developments are conceived and marketed. The history and culture of each
community has an important role in the acceptance and use of varying approaches to health. But the nature of
advances in science and technology, growing tensions between possibilities and cost, and demographic changes
throughout the world with increasing longevity and falling fertility pose many shared challenges (Mechanic and
Rochefort 1996). [Slide 2] Hong Kong is fortunate in being a wealthy region and one having attained health
outcomes comparable to the most advanced nations. But, it too, shares these challenges and dilemmas.
Throughout the world populations are aging, some much faster than others. Only about one-tenth of the
Hong Kong population is presently 65 years and older in contrast to such countries as Japan, Italy, Germany and
Sweden that have much higher proportions of elders. In just 15 years, the elderly subgroups in Japan and Italy will
approach one-quarter of their populations. Hong Kong has a longer period to anticipate this kind of transformation
but when its largest age cohorts, now ages 30-44, approach their older years, it too can anticipate challenging social
changes.
More important than the proportions of elderly are those of 80 years or more who we increasingly refer to
as the old-old and the oldest-old. Persons in these age groups have more disabilities and limitations of function and
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are more dependent than the younger old on family and community social supports. This old-old population is
increasing in most countries, and with growing longevity typical of world populations, most can anticipate significant
growth in more frail and more dependent individuals. Comparatively, Hong Kong is a youthful region with less
than 125,000 people 80 or older in 1997 (Hong Kong Hospital Authority 2000), but this age group will also grow
substantially in the coming decades. Health care costs for older populations are substantially higher than for other
age groups and can pose economic challenges if the expensive medical interventions increasingly available are
adopted (Schwartz 1998). Countries like the United States that have medicalized old age face greater difficulties in
dealing with long-term care than countries like the Netherlands and Denmark that have more well developed social
care models for frail elders.
One way of accommodating elderly persons with significant limitations in performing usual activities is the
nursing home, a residential facility providing nursing care 24 hours a day and assistance with daily living activities.
Such facilities are used differently in varying nations and reliable comparisons across countries is difficult. A
recent study of nursing homes in ten countries [Slide 3] ranging from Japan and Italy to the US and the UK (Ribbe et
al. 1997) concluded that “...no relationship appears to exist between the ageing status of a nation and the number of
nursing home beds available to its citizens or the rate of institutionalization...For example, Iceland, the youngest
country in our study pool, has the highest institutionalization rate, while Sweden, the oldest country, has a low rate.”
(p. 10)
Many factors affect such patterns and culture has a powerful role. Traditionally, in almost all countries
most of the responsibility fell on family members but throughout the world family size is decreasing, women are
more involved in the workforce, divorce rates are higher and there is increased geographic mobility. Thus, even in
countries with the strongest traditions of family responsibility, policy makers have had to explore alternatives. The
preferences of the elderly themselves is a powerful force in many countries, and there is a strong wish of many elders
to avoid institutional living. Thus, in the United States, nursing home admissions are falling despite increases in the
oldest-old population (Bishop 1999). For example, nursing home rates per 1,000 population for the age groups
65-74, 75-84 and 85+ all declined between 1985 and 1995. Part of this trend reflects the strong value of
maintaining as much independence as possible and receiving care in the least restrictive setting. Part reflects the
better health and functioning of elders at varying ages (Manton et al. 1998).
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New technologies also make it
possible to provide many medical services in homelike settings. Thus we are witnessing substantial growth in new
life care communities, assisted living facilities, supervised housing, board and care residences, adult day care, foster
care, and a range of new integrated community programs. One important model for community care of persons
with substantial limitations of function has been OnLok (Wiener and Skaggs 1995), an integrated long-term care
program within the Chinese community in San Francisco.
Policy makers in many countries with aging populations worry about the future maintenance of their
retirement and social security systems as the proportions of retired persons grow relative to the size of the working
population. Retirement in many countries occurs quite early relative to the length of life and data from various
countries suggest that life is not only extended but also the elderly at any age are more robust and have greater
functional capacity than in earlier periods (Singer and Manton 1998; Svanborg et al. 1986). Thus, there is much
interest in extending the period in which people remain in the workforce, particularly in countries with low
unemployment and the need for labor. Incentives embodied in retirement and pension systems in various countries
have a powerful influence on the extent of employment of the elderly (Gruber and Wise 1999). [Slide 4] In
Belgium, for example, almost no men are still working at age 65 and only about one-quarter of men are working at
age 60. In contrast, 60% of Japanese men are still working at age 65 and 75% at age 60. In the age group 60-64,
more than three-quarters of Japanese are still employed but in France and the Netherlands less than one-fifth are.
The United States, the UK, New Zealand and Australia cluster around the 50% level. The important role of social
policy here is abundantly clear. [Slide 5]
Patterns of disease in modern nations have also changed remarkably with degenerative and behavioral
factors taking precedence over infections and other communicable disease (Mechanic and Rochefort 1996). As in
Hong Kong, major causes of death are now from cancer, cardiovascular and pulmonary disease. A large proportion
of all deaths are preventable until old age if social, environmental and behavioral influences can be modified
(McGinnis and Foege 1993). Major risks worldwide now come from smoking, poor nutrition, high risk-taking in
sexual and other behaviors and accidents. Violence and suicide are also increasingly common causes of death
reflecting high levels of psychological morbidity and distress and the erosion of family and community life
(Desjarlais et al. 1995). Throughout the world, poverty is still the major determinant of ill health and mortality with
tuberculosis, malaria, AIDS, and other communicable diseases taking an extraordinary toll in addition to the factors
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already noted. The developed nations cannot be complacent about the traditional killers with the ubiquity of
worldwide population movements and the growing number of antibiotic resistant infections associated with the
casual use and misuse of antibiotics. There are many disease challenges but modern nations especially will have to
give their attention to the prevention of disability and functional maintenance and restoration.
Nations vary a great deal in the proportion of GNP devoted to health care. The United States is at one
extreme at 14% of GNP. By world standards, Hong Kong’s 5% is modest but it still faces the issue of how best to
respond to the growing expectations and demands for health care. The potential is there to spend much more, but
such increases must be weighed against opportunities in other valued areas. The fact that a region attains favorable
rates of infant mortality and adult longevity is noteworthy but this has more to do with overall standards of living
than with medical care. The value of medical care is rarely measured solely by mortality statistics since the role of
much of medical care is to enhance function and reduce distress. Thus, the more relevant question is the extent to
which the population at any age is free of disability, has a good level of function in the activities of daily living and a
sense of subjective well-being. Here such medical/surgical procedures as the removal of cataracts that restore sight
and the replacement of joints that allow physical mobility contribute to health in important ways not measured by
mortality statistics. This is also the case for many new pharmaceuticals that bring significant relief from physical
distress unrelated to mortality such as relief of pain from arthritis or reduction of anxiety or depression.
Communication across national boundaries contribute to rising public expectations and increased pressure
to spend more for health care. The biomedical industries and pharmaceutical companies now actively promote their
products directly to consumers encouraging them to make new demands on their hospitals, doctors, and other health
professionals. These range from advertising new expensive models of NMI machines, such as open air type models,
directly to the public as a way of indirectly pressuring hospitals to purchase such machines to widespread advertising
of prescription drugs. In the United States, it is not uncommon for consumer groups to form coalitions with
pharmaceutical companies to pressure government to increase prescription coverage. The billions of dollars spent
in promoting these medical products inevitably and importantly affect national systems of care. A recent report
from Vietnam (Ladinsky et al. 2000) even noted that physicians in Vietnam were being recruited away from state
practice with higher salaries as international pharmaceutical company salesmen. Nations find it increasingly
difficult to insulate themselves from international consumer comparisons as illustrated by the continuing pressures on
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the English National Health Service that has up to now devoted a lower proportion of GNP to medical care than their
European counterparts. The commitment of the Labor Government to equal their peers in such national
expenditures is in no small way due to the types of forces I am describing.
In making these generalizations about medical globalization we should be clear that culture and local
politics remain extremely powerful. There is no automatic or inevitable changes outside each Nation’s unique
history and experience, and alternative pathways are always possible. The forces of medical globalization, however,
make certain trends more likely. As the OECD (1994) concluded in a study of health care reform in seventeen
nations: [Slide 6]
“The most remarkable feature of health care system reform among the seventeen
countries is the degree of emerging convergence. Whether intentionally or not,
the reforms follow in the general direction of those pioneered in other countries.” (p. 45)
The Technologic Imperative and the Need to Ration
Advances in medical knowledge and technology provide increasing opportunities for new health care
expenditures (Schwartz 1998). [Slide 7] In some instances such new technologies offer opportunities to prevent
disease or correct problems in cost-effective ways. In others, new techniques of dubious value are widely
disseminated at large cost with no evidence of their value, much less their cost-effectiveness. Although there is
much interest among policy makers in evidence-based medicine, manufacturers of medical equipment and drugs and
specialty health providers have strong economic incentives to market new interventions aggressively as soon as they
become available. One of the more recent such modalities is lung screening for cigarette smokers using
low-radiation-dose computerized tomography. There is evidence that such imaging improves the likelihood of
detection of small non-calcified nodules (Henschke 1999). This provides an opportunity to detect lung cancer at an
earlier stage than with traditional chest radiography. However, there is no evidence that such screening can reduce
lung cancer mortality and false positive results are common. But this technology is being aggressively marketed to
cigarette smokers. One of my community’s local health care providers aggressively markets such screening on
radio and the Internet at a price of $325. The potential world market here is enormous given the prevalence of
persons who smoke or have a past history of smoking.
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Preventive lung imaging is just one of a large set of screening technologies that are aggressively marketed
without evidence that they reduce morbidity or save lives (Russell 1994). The use of the PSA test for prostate
cancer is now increasingly prevalent and accepted despite a lack of evidence that it reduces mortality. Indeed, like
other unproven screening approaches, it may contribute to poorer health by putting patients on a treatment trajectory
that results in invasive interventions that have serious side effects. Once patients are told they have cancer, the
social and psychological pressures to pursue treatment are strong despite the absence of evidence that good outcomes
will result. As Black and Welch (1993) inform us in an important article in the New England Journal of Medicine,
“...despite clinicians’ best intentions, many patients may have been labeled with diseases they do not really have, and
many have been given therapy they do not really need.”
This might be of less concern if these interventions were simply cost-ineffective, but there is a growing
body of evidence that too much unproven medical care may make health worse. Fisher and Welch (1999) in a
provocative review of a range of medical studies provide an informative framework to explain how more care may
lead to worse health. [Slide 8] The argument is complicated, but part of their abstract helps convey their view:
“More diagnosis creates the potential for labeling and detection of pseudo disease - disease that would
never become apparent to patients during their lifetime without testing. More treatment may lead to
tampering, interventions to correct random rather than systematic variation, and lower treatment thresholds,
where the risks outweigh the potential benefits. Because there are more diagnoses to treat and more
treatments to provide, physicians may be more likely to make mistakes and to be distracted from the issues
of greatest concern to their patients.” (p. 446)
Although evidence-based medicine sounds appropriate to policy makers, it is less appealing to patients and
their families, particularly those facing serious illness or death and seeking last chance therapies that offer any
potential. Cost-effectiveness is an assessment across populations but insured patients who are sick and want help
care little about whether a particular treatment is cost-effective for a population. This is why efforts at rationing are
so very controversial. When the public becomes aware that care is being rationed there is often a backlash or
political controversy. Many philosophers and ethicists seek rationing processes that are explicit and transparent,
but because of the inherent tension between individual wants and limits on public expenditure efforts to ration
explicitly often results in conflict (Mechanic 1995). Many nations are now struggling with the issue of how best to
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make health choices in a politically acceptable fashion (Klein et al. 1996).
Types of Convergence Among Nations
Nations, depending on their history and culture, have very different political and administrative systems for
organizing and financing health care. Nevertheless, as the OECD noted in its study of seventeen countries, there
has been considerable similarity in the reform ideas being introduced and the extent to which nations seem to be
learning from one another. In the remainder of my discussion, I briefly review some tendencies toward common
practice.
[Slide 9] These include health promotion, primary medical care, building more seamless systems of
care through administrative and clinical integration, improving efficiency and effectiveness, developing chronic care
and long-term care services, improving quality, and using market incentives and quasi-markets.
Health Promotion [Slide 10]
The importance of behavioral risk factors, particularly in respect to smoking, diet and sexual behavior have
now been widely disseminated and most countries have some initiatives in these areas.
Many countries that had
well conceived and developed programs in contraception and fertility control have now extended their sophisticated
epidemiological approaches to additional health problems. The extraordinary devastation caused by AIDS in
Sub-Saharan Africa, parts of Asia and in some areas of the United States among others made clear the importance of
health education and behavioral approaches. Many preventive actions depend on motivation and cooperation of
affected populations. There are impressive indications, even in the poorest countries, that aggressive outreach can
help prevent many problems, reduce infant mortality, and limit contagion. Solely reducing cigarette smoking, the
single largest cause of morbidity and mortality, can substantially reduce all the three major causes of death in
developed countries - heart disease, cancer and pulmonary disease - and many other illnesses as well.
Policy makers in many countries view prevention activities quite narrowly as an individual approach, and
individual efforts have not been particularly successful. It is increasingly clear that successful prevention requires a
multi-level community approach in which varying policy initiatives reinforce one another (Smedley and Syme 2000).
Such initiatives involve not only efforts to educate and motivate and preventive efforts at the clinical level but also
community mobilization to reinforce such practices, social and economic incentives to redirect behavior, regulatory
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initiatives to control access to noxious agents and the establishment of social norms. Two very successful efforts in
the United States include the reduction of cigarette smoking and significant progress in injury control, particularly
motor vehicle accidents.
The epidemiological approach in motor vehicle safety nicely illustrates the value of a multi-level program.
These involve the behavior of the driver, the construction of the vehicle, and the social system as it affects driving
including highway design, building materials, driving norms, policing, etc. At the individual level, the goal is to
induce driving skills, judgment and lawfulness on the part of drivers, with particular focus on drinking and driving.
At the vehicle level, the goal is a design that not only contributes to accident avoidance but also protects passengers
in the event of a collision. There have been dramatic improvements in auto design including air bags, seat belts,
improved brakes, interior protections, breakaway engines and the like. Finally, the regulatory context is also
important including driving norms, enforcement, licensing, vehicle inspection, and the like. The point of
multi-level intervention is that one attacks the problem not only in relation to the host but also in respect to the agent
and the environment.
Primary Health Care [Slide 11]
The basic logic of health care is one of a hierarchy of levels from the most simple types of self care to
increasingly complicated types of interventions. The majority of medical care is relatively simple although the
uncontrolled growth of medical specialization often obscures the fact that care is a set of organized functions that can
be performed by persons with varying types of training and capacities. Primary medical care which may constitute
between half and three-quarters of all health care encounters is a function that can be carried out by doctors, nurses,
health aides or teams. There is persuasive evidence, for example, that nurse practitioners can provide a level of
primary care equal in quality to doctors and often superior in terms of patient satisfaction (Mundinger et al. 2000).
The decision as to who performs the primary care function depends on the financial capabilities of the system, the
organization and power of each of the health occupations, the economic incentives to health workers to provide
primary care and the expectations and demands of the population. Any of a variety of first-contact practitioners can
provide basic preventive services, treat everyday common problems, triage patients who need more specialized care,
and provide continuing care for persons with many chronic illnesses.
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I had the privilege more than 20 years ago of being in the first official U.S. delegation to learn about rural
health care in the PRC. We traveled to many areas in rural China to understand how basic primary care services
were being provided. The cooperative medical services in much of the country were primitive but it was
remarkable how much could be accomplished with minimal resources and minimally trained personnel. In a small
survey of patients we did, it was evident even then that many patients aspired to more sophisticated services
(Mechanic and Kleinman 1980) and with economic growth and privatization, many patients sought more advanced
services and better trained providers. I have not had an opportunity to revisit these communities but the literature
suggests that in many areas the cooperative insurance system collapsed leaving some better off but others at greater
risk than before (Liu et al. 1999; Hsiao 1994).
Most nations aspire to provide basic primary care services to all, a laudable campaign of the World Health
Organization. Tiers of service are common in most nations, reflecting the economic capabilities of consumers.
From a public policy standpoint the goal to insure a reasonable quality of service to all and the appropriate
organization of primary care is seen as the vehicle to achieve this. How the system organizes primary care relative
to more specialized care, inpatient care, and tertiary services depends on many factors including budgetary capacity,
available personnel and facilities, and the political context of health care organization. In most systems, those more
affluent buy their own private services which may not always provide better care but certainly improved amenities.
One exception is Canada which prohibits insurers from offering services covered by the National Health Plan.
With budgetary problems this too is now under reconsideration (Naylor 1999). The important point is that no
nation is without the capacity to fulfill important primary care functions.
Developing Seamless Systems of Care [Slide 12]
Most health experts can speak elegantly about the importance of integrating care into seamless systems in
which persons can move efficiently to the types and levels of care they require. Experience teaches, however, that
there are few goals in health care more difficult because of economic, cultural, and professional barriers and the
types of attitudes, power relationships and incentives health professionals face at varying levels of the health care
system. Studies in the United States where integrated systems have been an important aspiration indicate that while
administrative integration is readily achievable, clinical integration is far more difficult and rarely achieved (Shortell
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et al. 1996).
In theory clinical integration should be more achievable in the American context because the typical
primary care physician continues to care for their patients when they go into the hospital. However these doctors
are away from the hospital for most of the day and patient care is under the direction of house staff and nurses.
Communication is often poor among the various specialists who become involved in a complicated patient’s care and
frequently coordination fails. As the range of services and professionals involved in a patient’s care grow, the
probability of duplication and errors increase. Various health plans have tried a range of innovations seeking to
improve integration and coordination including the development of a speciality of hospitalists, primary nursing
where a nurse specialist takes responsibility for coordinating care from patient admission to discharge, and case
managers. Much effort has been put into developing a unified electronic medical record to improve communication
and coordination and there are several examples of impressive hospital information systems designed to facilitate
communication, provide treatment cues and practice suggestions, and avoid medication and other errors (Millenson
1997). Yet, it is fair to say that we are a considerable distance from solving the integration problem.
The integration problem has been even more acute in the UK with separate general practice and specialty
services, large differences in prestige between general practitioners and specialists, and significant waiting lists for
many specialty services. One of the advantages of general practitioner fundholding was that it increased the
influence of GPs relative to consultants and provided some pressure toward more responsiveness. Some
disapproved of GP fundholding because it was seen as a means for some patients to gain advantage over others.
The Labor government has moved policy toward what it now calls primary care commissioning. As a long-term
observer of the National Health Service I note that the concepts have continued to change but the lack of
coordination and integration between GP, hospital and local authorities continue as significant problems.
Nevertheless, clinical integration is an aspiration worthy of continued efforts everywhere. Health is a
holistic concept and patients are not served well by fragmentation, duplication, and gaps in services. These
problems are particularly acute in chronic illness, long-term care and behavioral health and managing the care of
persons with disabilities. Much emphasis around the world is now being placed on teams, case management,
enhanced nurse leadership, and improved information systems.
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Improving Efficiency and Effectiveness [Slide 13]
As the costs of medical care have mounted in many countries, much attention has focused on the many
inefficiencies in care, the prevalence of untested and unproven interventions and the extraordinary practice variations
from one geographic area to another. Rates of inpatient care, length of stay, surgical interventions and much more
can vary many times over among populations that are comparable in morbidity. Although these practice variations
have been studied for many years, and are due to a significant degree to the amount and types of specialists and
facilities in a particular geographic area, they are not fully understood. It appears that practice cultures develop in
particular localities that in part reflect the prior training of professionals and their mutual influences on one another.
Whatever the causes, many efforts are being made to reduce the range of such variations by managing care through
utilization review and physician profiling, introducing and encouraging evidence-based practice guidelines and
disease management approaches, and promoting outcomes assessment and cost-effectiveness research.
Progress in these areas is difficult without taking account of the fact that medical care is an important
business and that the responses of institutions and health professionals are shaped by economic incentives. Care is
also influenced by professional culture and ideologies and the fact that individual clinical experience and judgment
are often viewed by practitioners as superior to clinical studies and even randomized controlled trials. Moreover,
uncertainty remains in much of medical care and there is a proliferation of sometimes conflicting clinical guidelines
and practice standards being issued by health plans, government bodies, professional groups, and commercial firms.
Each has its own interests and it is often difficult, in any case, to focus the busy clinician’s attention. Thus, while
efforts are moving forward, it is not without confusion and uncertainty. It is not clear that any of this has had
significant impact on how clinicians practice.
In the United States, some success in controlling costs has been achieved through managed care. Most of
the savings have come through reductions in inpatient care and particularly inpatient length of stay and by reducing
payments to institutions and professionals. Managed care involves a large range of structures and approaches and,
thus, there is no simple way to assess it. The limited evidence indicates considerable variability in performance
both in managed care and in traditional care systems and little advantage to either overall in terms of quality (Miller
and Luft 1994, 1997). Nevertheless, the unrealized potential of managed care is to use new approaches and
incentives to encourage evidence-based practice and to reward clinical quality and responsiveness.
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Developing Chronic Care Models [Slide 14]
It is almost a cliche to note that while most patients have chronic care needs, the prevalent approach is
organized around an acute care model. It is commonplace to note the lack of fit between much ambulatory care and
hospital practice and the challenges of long-term care for persons with complicated chronic illnesses and disabilities.
In addition to the already noted issues of fragmentation and poor coordination is the added difficulties of bridging
medical care with the range of socio-medical and rehabilitative services often needed. As medicine involves
supportive, rehabilitative and other social services it must work with other sectors that have their own cultures,
professional preferences, and incentives. Medical care often fails in establishing these needed links.
Most countries continue to struggle with how best to connect the range of services needed by persons with
persistent illnesses and disabilities. This becomes an increasingly important challenge as we depend less on
institutions and more on community care for the frail elderly, persons with disabilities, children with physical and
mental handicap, and persons with serious and persistent mental illnesses. Interesting and thoughtful models are
being tried in many places throughout the world but much dissatisfaction remains in achieving appropriate
organization and care delivery.
Complex problems require specialized systems and it is difficult to generalize. Thus, I focus here on one
example, the community care of persons with schizophrenia and other serious and persistent mental illnesses. In
much of the world, management of care for serious mental illness has moved substantially from institutions to the
community (Mechanic 1999). The record of failures in community care in the United States, the UK and many
other countries, despite considerable expenditures, is sobering. A model for community care, the Program in
Assertive Community Treatment (Stein and Test 1985), developed a quarter of a century ago, has repeatedly
demonstrated effective performance in randomized controlled clinical trials and other studies in several countries and
most informed observers agree on this as the “gold standard” of care for community management of complex and
persistent conditions (Dixon 2000). Nevertheless, its dissemination has taken decades and only now has it become
a standard goal for such care in the U.S. and UK.
The PACT model, as it is called, has many elements desirable in any chronic care program, although it has
other features specific to the population served. The clinical team has responsibility and authority for managing the
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needed care wherever and whenever such needs arise. Thus, it is a 7 day a week, 24 hour responsibility and the
mobile teams provide assertive management in the community including medication treatment and compliance,
living arrangements, daily activities, social supports, employment rehabilitation, and the like. Such programs put
new demands on members of the treatment team and require more organization and coordination than is typical of
everyday mental health practice. But its growing adoption around the world suggests that the barriers to
implementation can be overcome.
Improving Quality [Slide 15]
Much of what has already been said refers to quality of care but quality assurance transcends these
observations. From an organizational perspective, medical care is very much still a cottage industry with very
primitive systems of quality control relative to most large-scale corporate activities. Errors and preventable injuries
and deaths abound because of failures to put in place the types of checks commonplace in other sectors. A recent
report by the Institute of Medicine (Kohn et al. 2000) in the United States estimated that 44,000 persons die each
year in the U.S. because of medical errors and suggest the number may indeed be much higher. The actual number
of deaths is arguable but the unequivocal fact is that medical errors are a significant problem in the United States and
throughout the world, and there has been much international attention focused on this report and the issues it
addresses.
Safety and errors are major concerns but quality issues also relate to every health care transaction that takes
place and the effectiveness of processes of care in achieving desired outcomes. Such outcomes include both the
efficacy of various treatments, the appropriateness with which they are provided in specific contexts and the extent to
which care is responsive and caring from the perspective of the patient. A recent study by a research group at the
RAND Corporation (Schuster et al. 1998) estimated that only about 50% of preventive care reached recommended
levels and that 30% of acute care and 20% of chronic care was contraindicated.
Health services researchers make a distinction between efficacy and effectiveness because the application of
efficacy expectations from highly controlled studies and research environments may yield different results when
actually applied under usual practice conditions. Thus, it is essential to measure how interventions work in the field
among a range of health professionals and patients.
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Major efforts are now being made to assess quality in the United States, the UK, Canada and other countries.
Among these is the development of tracer measures of quality that allow health care plans to be evaluated against
one another and to develop report cards for consumers that provide useful information that assist them in their choice
of health plans. More progress has been made in measuring access to care and satisfaction with care than quality of
care processes and health outcomes. It remains unclear to what extent the measures and data used from various
settings are representative, reliable, and useful to purchasers and to what degree they successfully tap quality of care
in contrast to selective characteristics of patients associated with varying outcomes including case severity. We are
still at an early stage in measuring quality and it is not unreasonable to anticipate considerable progress in the next
decade.
Market Incentives and Quasi-Markets [Slide 16]
Interest in making medical care less of a planned activity and more of a market in many countries may
reflect current American economic dominance and the strong representation of American economic ideology in
world organizations like the World Bank. Although medical care deviates substantially from any reasonable
concept of a well-functioning market, the United States, Australia and other countries have moved aggressively
toward privatization and encouragement of greater competition. The achievements are arguable but the evidence of
competitiveness is now apparent everywhere.
The aspiration is to have health plans and health professionals
compete on quality and cost-effectiveness but most competition as it presently exists is on price and risk selection.
Few health care systems have completely privatized but the world trend has been more toward the creation
of quasi-markets. With the breakup of the Soviet Union and difficulties in Eastern Europe, a number of national
health programs were transformed from highly bureaucratized national programs to privatized insurance models with
greater competition among providers (Mechanic and Rochefort 1996). Even highly established national systems
such as those in the UK and Sweden have been intrigued with the idea of internal markets, and greater competition
and choice, although it would be an overstatement to suggest that they have moved substantially in this direction
(LeGrand 1999). While the health care changes that occurred during Conservative rule in the UK received mixed
reviews, it seems apparent that they have contributed to shaking up established and unresponsive professional and
bureaucratic behavior.
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The extent of interest in American medical arrangements among many countries is always a surprise to me
because by any world standard we do not get “value for dollars.” We are unusual among modern nations in having
failed to achieve universal health insurance. We spend far more per capita and as a nation for health care than any
other country but still have a large and growing population of uninsured persons - now around 45 million people.
The uninsured do receive care but at a later point in illness and at a lower intensity than insured persons. In short,
the US system of health care provides a cautionary tale of what not to do in many areas of medical care. Its strength
is its high level of technical innovativeness and sophistication. It has the capacity to offer the very best and most
advanced care but it does so at great cost and with large inequalities. Competition in health systems can be an
invigorating and productive force but to be effective it must be managed to deal with the large inequalities of power,
knowledge and information between providers and patients, the large incentives toward risk segmentation and patient
selection, and the need for accountability.
In Summary
Every nation must decide how to allocate public expenditures among varying priorities and responsibilities,
the extent of public and private responsibilities for health care, and the types of services that constitute the health
scheme. All nations cover basic preventive, ambulatory and hospital services, but there is a great variety in public
provision of other important services and products such as prescription drugs and dental care. Tradition and culture
help define whether health care includes access to spas and natural treatments, respite services, chiropractic,
traditional and alternative medicines, behavioral health and substance abuse services among many others. There are
also a range of views about whether services that enhance the quality of life such as Viagra and related products for
impotence or in vitro fertilization are appropriate responsibilities of public health care systems and at what level.
More fundamentally, each nation must decide how to balance individual responsibility, privatization and
competition with the need for helping those less fortunate and for social solidarity. Excessive individualism is
associated with large health inequalities, a growing concern in many countries. Every decent system provides a
safety net for those incapable of meeting their own needs. Beyond this, universal health coverage is a widely shared
value that contributes to social solidarity as well as to more equal care. Nations differ on how they see the balance
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between individual and public responsibility and what they are willing to do to rectify inequalities. While they
differ on the extent of inequality that is justifiable, they can agree that it is fair that each person have the health care
necessary to compete to their fullest potential.
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