The Role of the Public and Private Sectors in Health Financing in Developing Countries

Content Provider	Semantic Scholar
Author	Lal, D. Kanji
Copyright Year	1994
Abstract	This paper distinguishes between public health programs and clinical services, and argues that whilst the case for public financing of the former is valid, that for the latter is more questionable. This is partly because of the impossibility any objective definition of an essential clinical package for any country. The use of DALYs (or QALYs) to derive such a package is shown to be conceptually unsound. Equally dubious are the rationales based on "market failure" in health care for public intervention. It is argued there is no a prioi reason to believe that with imperfect information (the major cited source of "market failure") there is any political solution which is "Pareto-superior" to that provided by a competitive market. Nor are the other purported "market failures" unique to health markets. So, as arguments based on an unattainable ideal are considered to be irrelevant in suppressing private markets by political solutions for other goods and services, the same conclusion applies to health markets. As regards the justification for public financing of health care for the poor, it is argued this case is only valid for destitutes, who for reasons of political economy may not do any better from public transfers than from private charity. But such charity might be stimulated by earmarking foreign aid funds for poverty alleviation, on a matching basis, to charities dealing with destitutes. Finally, the paper examines the lessons to be learnt from the private health care market in the United States and the pre-National Health Service private health market in the United Kingdom as contrasted with the experience with socialized medicine. It is argued that the ills of the U.S. health market are due to policy induced distortions in their working. For the "working poor" the mutual aid societies of 19th century Britain are of particular relevance for developing countries, and they too could be encouraged through the provision of matching public funds.
File Format	PDF HTM / HTML
Alternate Webpage(s)	http://documents.worldbank.org/curated/en/339951468761697672/pdf/multi0page.pdf
Language	English
Access Restriction	Open
Content Type	Text
Resource Type	Article