Will a market deliver quality and efficiency in health care better than central planning ever could? NoBMJ 2010; 340 doi: https://doi.org/10.1136/bmj.c1300 (Published 10 March 2010) Cite this as: BMJ 2010;340:c1300
All rapid responses
The debate on the role of the market in healthcare is still going on,
both in Europe and in the U.S.(1)(2)(3) In 2008 the World Health
Organization (WHO) published its report on Social Determinants of Health.
(4) This report presents evidence of the damaging effects of marketizing
health care. Its conclusion is: “Higher private sector spending (relative
to all health expenditure) is associated with worse health-adjusted life
expectancy, while higher public and social insurance spending on health
(relative to GDP) is associated with better health-adjusted life
expectancy. The Commission considers health care a common good, not a
market commodity. (…) Healthcare is a matter of rights and a public sector
duty, rather than being left to markets.” Besides these empirical
evidences used in the WHO report, there are five disparities inherent in
health and health care which according to the theorists of the market
itself stand an optimal functioning of the market in the way. These
inequalities prevent the market from being able to ensure high quality and
accessible health care.
First of all there is social inequality in health, of which abundant
evidence is given in the WHO Report. People who belong to the lowest
income groups or who have had poorest education get ill most often and
need most care.
Secondly there is inequality in health needs, which is termed ‘skewed
risk distribution’. In Belgium for instance, 10% of the population, mostly
elderly and chronically ill patients, consume 70% of all health care
expenses. (5) The ageing of the population will increase this lopsided
demand for health care.
In third place there is the uneven extent to which people are able to
enjoy existing healthcare facilities, the so-called ‘inverse care law’.
(6) “The poor consistently gain less from health services than the better
off, is visible in every country across the globe”, according to the WHO
For health care accessible to all, solidarity is needed because of the
three disparities mentioned before. Solidarity means a transfer from the
‘wealthy and healthy’ to the people who are ‘infirm and in want’. On the
income side, the strong should bear the heaviest burdens. On the expenses
side, means ought to be distributed according to those who need most
(need) and not, as in the market, according to those who are able to pay
most (purchasing power) for them or may gain most by them (profit). There
is a conflict between solidarity and market logic.
The fourth inequality is in information regarding healthcare: the
existent information asymmetry between doctors and patients. (7) Health
care is not any other consumer product that can be chosen freely. A
correct free market mechanism requires correct information of consumers
who are competent to choose freely. A patient cannot just go to the
doctor’s and say: ‘I want this or that medicine for high blood pressure’.
In the end it will always be the doctor who decides and prescribes.
Information asymmetry is the reason why public advertising for medicine on
prescription is still prohibited in Europe, and rightly so.
Finally there are the imbalances in health care price fixing. Health
has no price. A breast cancer patient will be willing to sell her house if
it may save her life. That is the main reason why the newest anti-cancer
medication such as trastuzumab costs 35,000 Euros per treatment year. (8)
That high price is arguably out of all proportion to the actual cost of
development. The pharmaceutical company puts the price on the medicine
that the patient or the community is prepared to pay. The market system
supposes strong price elasticity based on supply and demand. Health care
is incompatible with this system. The vulnerable, hence unequal position
of the patient leaves him or her no other choice than to pay the price
that is asked. Moreover information asymmetry results in the least
informed patients being the easiest victims. Poorly educated people are
easiest tempted to “silly expenses” in matters of health. For them also
health has no price. If we want healthcare to be a basic right, it must
not be a commodity. Not profitability but solidarity is the best insurance
(1 Gubb James.Will a market deliver quality and efficiency in health
care better than central planning ever could? Yes BMJ 2010 340: c1297.
(2) Woolhandler S, Himmelstein DU. Competition in a publicly funded
healthcare system. BMJ 2007;335:1126-9.
(3 Kuttner R. Market-based failure - a second opinion on U.S. health care
costs. N Engl J Med.2008;358:549-51.
(4) WHO Commission on Social Determinants of Health. Closing the gap in a
generation: health equity through action on the social determinants of
health. Final report of the Commission on Social Determinants of Health.
Geneva: WHO, 2008. pp. 95.
(5) Belgian population ranked to medical consumption. National Health
Survey. RIZIV. 1997.
(6) Hart JT. The inverse care law. Lancet 1971;1:405-412.
(7) de Laat E, Windmeijer F, Douven R. How does pharmaceutical marketing
influence doctor’s prescribing behaviour? Centraal Planbureau.2002. Nivel
studie. Universiteit Utrecht. 2003.
(8) Van Duppen D, Avonts M. The cost of the newest cancer drugs. [letter]
Lancet 2007; 370: 317-318.
Competing interests: No competing interests