Role of state in health policy

Role of State and Private Sector in Health Policy and the dynamics of Policy Agenda Setting Nayyar R. Kazmi

Depending on where you live, the state may, for example:
• regulate the number of children you have (China)
• decide whether or not divorcees are allowed a second child (allowed in Shanghai but not in the rest of China)
• prohibit private medical practice (Cuba)
• determine the age at which sex-change therapy is allowed (presently 13 years in Australia)
• determine whether or not emergency contraception is available over-the-counter (not available in the USA but available in the UK)

The main justiﬁcations for state involvement are:
• market failure
• information asymmetry between consumer and provider
• need for care uncertain and often costly
• to achieve social equity of access to care

Reinvention of government and Health Sector Reform
Prevailing neo-liberal economic thinking was brought to bear to understand the root causes of the malaise in the health sector and greatly inﬂuenced prescriptions on the appropriate role for the state. Two theories stand out:
1. public choice and
2. property rights.

Public Choice
deals with the nature of decision making in government. It argues that politicians and bureaucrats behave like other participants in the political system in that they pursue their own interests.
Consequently, politicians can be expected to promote policies which will maximize their chances of re-election while bureaucrats can be expected to attempt to maximize their budgets because budget size affects bureaucrats’ rewards either in terms of salary, status or opportunities to engage in corruption.
As a result of these perverse incentives, the public sector is deemed to be wasteful and not concerned with efﬁciency or equity

Property Rights
Property rights theorists explained poor public sector performance through the absence of property rights. They argue that in the private sector, owners of property rights, whether owners of firms or shareholders, have strong incentives to maximize efficiency of resource use as the returns to investment depend upon efficiency.
In contrast, such pressure does not arise in the public sector; staff may perform poorly at no cost to themselves, resulting in a poorly performing systems overall.
They have few reasons to do well because they cannot benefit personally from goal performance, unlike in a business.
Both theories draw attention to the incentives which motivate state officials and how these influence the policies that they pursue

Market Reforms
Role of state redefined
Provision of Internal Markets
Decentralization
Stewardship Role of the State

Private Sector
The private for-profit (or commercial) sector is characterized by its market orientation. It encompasses organizations that seek to make profits for their owners. Profit,or a return on investment, is the central defining feature of the commercial sector.
Many firms pursue additional objectives related, for example, to social, environmental or employee concerns but these are, of necessity, secondary and supportive of the primary objective which concerns profit

Private Sector- Contd
A wide range of industry-funded think tanks, ‘scientiﬁc’ organizations, advocacy groups (such as patient groups) and even public relations ﬁrms working for industry are actors engaged in the health policy arena. For example, the tobacco company Philip Morris established the Institute of Regulatory Policy as a vehicle to lobby the US federal government and delay the publication of a report by the Environmental Protection Agency on environmental tobacco smoke

Why Private Sector a Powerful entity in Policy Process
Power is the ability to achieve a desired result. Resources often confer power and, on that basis, the power of some industries and ﬁrms may be obvious to you.
Of the top 100 ‘economies’ in the world 49 are countries, but 51 are ﬁrms when measured by market capitalization.

How is the Private Sector involved in the Policy Making Process
Self regulation
Self-regulation concerns efforts by private companies to establish their own rules and policies for operating within a speciﬁc domain. For example, rules governing how to design, categorize, produce and handle particular goods and services are routinely adopted by groups of companies and industries

Co-Regulation
Co-regulation presents a ‘third way’ between statutory regulation and self-regulation. It may be viewed as public sector involvement in business self-regulation. The idea is that public and private sectors will negotiate on an agreed set of policy or regulatory objectives. Subsequently, the private sector will take responsibility for implementation of the provisions. Monitoring compliance may remain a public responsibility or may be contracted out to a third party

Agenda Setting- Key Terms
Agenda setting Process by which certain issues come onto the policy agenda from the much larger number of issues potentially worthy of attention by policy makers.
Feasibility A characteristic of issues for which there is a practical solution.
Legitimacy A characteristic of issues that policy makers see as appropriate for government to act on.
Policy agenda List of issues to which an organization is giving serious attention at any one time with a view to taking some sort of action

Agenda Setting- Key Terms
Policy stream: The set of possible policy solutions or alternatives developed by experts, politicians, bureaucrats and interest groups, together with the activities of those interested in these options (e.g. debates between researchers).
Policy windows: Points in time when the opportunity arises for an issue to come onto the policy agenda and be taken seriously with a view to action.
Politics stream: Political events such as shifts in the national mood or public opinion, elections and changes in government, social uprisings, demonstrations and campaigns by interest groups.
Problem stream: Indicators of the scale and signiﬁcance of an issue which give it visibility.
Suppor:t A characteristic of issues that the public and other key political interests want to see responded to

What is Policy Agenda
the list of subjects or problems to which government officials and people outside of government closely associated with those officials, are paying some serious attention at any given time . . . Out of the set of all conceivable subjects or problems to which officials could be paying attention, they do in fact seriously attend to some rather than others

Obviously the list of problems under active consideration varies from one section of the government to another. The president or prime minister will be considering major items such as the state of the economy or relations with other countries. The Minister and Ministry of Health will have a more specialized agenda which may include a few ‘high politics’ issues, such as whether a system of national health insurance should be established, as well as a larger number of ‘low politics’ issues such as whether a particular drug should be approved for use and, if so, whether it is worth being reimbursed as part of the publicly ﬁnanced health care system

Why Issues Get onto the Ploicy Agenda
Agenda Setting in Politics-as-usual Circumstances
Hall Model
Kingdom Model

Agenda Setting in Politics-as-usual Circumstances
what made its way onto the policy agenda was more a function of long-term changes in socio economic conditions that produced a set of problems to which governments had to respond eventually even if there had been no systematic assessment of potential policy problems. From this perspective, countries with ageing populations will have to respond eventually to the implications for retirement pensions, health services, long-term care, transport, and so on

Hall Model
This approach proposes that only when an issue and likely response are high in terms of their legitimacy, feasibility and support do they get onto a government agenda
Legitimacy is a characteristic of issues with which governments believe they should be concerned and in which they have a right or even obligation to intervene. At the high end, most citizens in most societies in the past and the present would expect the government to keep law and order and to defend the country from attack.These would be widely accepted as highly legitimate state activities

Feasibility refers to the potential for implementing the policy. It is deﬁned by prevailing technical and theoretical knowledge, resources, availability of skilled staff, administrative capability and existence of the necessary infrastructure of government. There may be technological, ﬁnancial or workforce limitations that suggest that a particular policy may be impossible to implement, regardless of how legitimate it is seen to be.

support refers to the elusive but important issue of public support for government, at least in relation to the issue in question. Clearly, more authoritarian and non-elected regimes are less dependent on popular support than democratic governments, but even dictatorships have to ensure that there is some support among key groups, such as the armed forces, for their policies. If support is lacking, or discontent with the government as a whole is high, it may be very difﬁcult for a government to put an issue on the agenda and do anything about it

Kingdon Model

Lieutenant-General and Army Chief of Staff HM Ershad seized power in a military coup in Bangladesh in 1982. Within four weeks of the coup he had established an expert commit tee of eight to confront widely discussed problems in the production, distribution and consumption of pharmaceuticals. Less than three months later the Bangladesh (Control) Ordinance of 1982 was issued as a Declaration by Ershad, based on a set of 16 guidelines that would regulate the pharmaceutical sector. The main aim of the Ordinance was to halve the ‘wastage of foreign exchange through the production and/or importation of unnecessary drugs or drugs of marginal value’. The drugs policy was to be applied to both private and public sectors and created a restricted national formulary of 150 essential drugs plus 100 supplementary drugs for specialized use which could be produced at relatively low cost. Over 1,600 products deemed ‘useless, ineffective or harmful’ were banned.
The formulation of the drugs policy was initiated by a group of concerned physicians and others with close links to the new president, without external consultation and discussion. The Bangladesh Medical Association was represented by one member of its pharmaceuticals sub-committee, but its General-Secretary was not ofﬁcially involved because of his known connections to a transnational pharmaceutical corporation. The pharmaceutical industry was not represented at all on the expert committee. It was argued that its presence would distort and delay policy change. Once the policy was on the agenda and had been promulgated, the industry, both domestic and transnational, launched an advertising campaign against the drugs list.
Among the physicians on the committee was a well-known doctor, Zafrullah Chowdhury, who had established the Gonoshasthaya Kendra (GK) health care project soon after independence in 1971. Among other activities, GK manufactured essential generic drugs in Bangladesh. Production had begun in 1981 and by 1986 GK Pharmaceuticals Ltd was producing over 20 products. Later Dr Chowdhury was accused of promoting the interests of GK Pharmaceuticals through the committee.

Role of state in health policy

by Nayyar Kazmi on Jan 12, 2011

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Role of state in health policy Presentation Transcript