Incentives and the reform of health care systems.

This thesis is a study of the reform of health systems from an international and an economic perspective. Its main unifying theme is to investigate the role played by incentives in the performance of health systems and their reform. In the first part, the thesis reconsiders the economic reasons that form the basis for public intervention in health markets, both in financing as well as in service provision. In fact, one of the key elements introduced with health reforms in the last few years has been greater competition in health insurance and provision, among private as well as public providers. It is thus interesting to start the analysis by revisiting the effects of competition in health markets on the basis of more recent contributions in microeconomic theory, our aim being to ascertain what would be the major deficiencies of unregulated markets, and to investigate into the impact of different public corrective measures. Chapter 2 looks at the effects of competition in the health insurance market and at the impact of different forms of public intervention to correct market failures. Chapter 3 presents a model of oligopolistic competition between two health providers, and it investigates the potential role of quality and/or price regulation as a means to extend coverage/improve quality beyond the point reached in correspondence to the market equilibrium. Then, the thesis focuses on the new resource allocation, contracting mechanisms and payment systems for providers (RAP reforms) implemented over the last few years, within the public sector, or intended to discipline the relationship with health care providers. Chapters 4 gives an introduction to the RAP reforms, their justification and main components. Chapter 5 focuses on payment systems and on efficiency issues, while Chapter 6 on the equity consequences of RAP reforms. Chapter 7 and 8 look at the health reforms implemented over the last decade in the former socialist countries. The evolution of health systems in those countries provides interesting lessons, illuminating the major weaknesses and limitations of the health reform model that has been prevailing and proposed world-wide over the last decade. Chapter 8 presents a qualitative study of the impact of the health reforms in Georgia, focusing specifically on the phenomenon of out-of-pocket payments, formal and informal, which currently are the prevalent source of funding for health in the region. A concluding chapter (Chapter 9) summarises some of the main findings of the thesis