Six Countries, Six Reform Models The Healthcare Reform

Experience Of Israel, The Netherlands, New Zealand,

Singapore, Switzerland And Taiwan Healthcare Reforms
"Under The Radar Screen"

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b821_FM.qxd 11/17/2009 8:04 PM Page v

Contents

Foreword vii

Acknowledgements xi

About the Authors xiii

Introduction 1
Kieke G. H. Okma and Luca Crivelli

1. Israel: Partial Health Care Reform as Laboratory 25

of Ongoing Change
David Chinitz and Rachel Meislin

2. Change and Continuity in Dutch Health Care: 43

Origins and Consequences of the 2006
Health Insurance Reforms
Kieke G. H. Okma and Hans Maarse

3. Reform and Re-reform of the New Zealand System 83

Toni Ashton and Tim Tenbensel

4. Health Care Reforms in Singapore 111

Meng-Kin Lim

5. Consumer-Driven Versus Regulated Health Insurance 137

in Switzerland
Luca Crivelli and Iva Bolgiani

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Contents

6. Taiwan’s National Health Insurance System: 171

High Value for the Dollar
Tsung-Mei Cheng

Conclusions: Debates, Reforms, and Policy Adjustments 205

Kieke G. H. Okma and Luca Crivelli

Appendix A 215

Index 231

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Foreword

For anyone wondering whether to invest time in reading a new

cross-national study of policy making and policy implementation in
health care systems, there are three tests. First, does the study provide
authoratitive new information? Second, does the new information fit into
an existing interpretative framework, so that its findings are not randomly
idiosyncratic but add to our existing stock of knowledge and theory?
Third, and perhaps the most important, does it have an element of chal-
lenge and so provoke reflection about at least some of our assumptions
about the dynamics of health care policy making and implementation? In
short, the most instructive studies offer a mixture of reassurance and sur-
prise, building on existing theory but also raising new questions.
This study passes all three tests, and offers just the right mix of the
predictable and the surprising. The authors of the six national studies are
all steeped in the history of the health care systems of their countries. Here
there are no examples of intellectual tourism or instant, parachute expert-
ise. So the accounts carry authority, although no doubt the national expe-
rience has also shaped the interpretations of the authors (the accounts
would be dull indeed if they aspired to that scholarly mirage, total neu-
trality and objectivity: there is a nice critical edge to most chapters).
Further, there is analytic discipline: Explanations of policy change are
anchored in the comparative literature, so that common themes run
through the chapters. Familiar concepts, like path dependency, provide
signposts as we move through unfamiliar territory. And, satisfying my last
criterion, the accounts yield interesting puzzles as well as insights about
the dynamics of policy making in the health care arena.

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Foreword

The insights and puzzles are, in a sense, independent of any interest

in the six specific countries covered by the study. The countries are a
remarkably heterogeneous lot. There is no obvious reason why anyone
interested in Singapore and Taiwan as examples of health care develop-
ment in the Asian tiger economies should also be interested in Switzerland
and the Netherlands as examples of corporatist style policy making, or in
New Zealand and Israel for that matter. And conversely so. The variations
between the six are remarkable. In terms of size, they range from under
five million to almost 23 million. They include the country with the low-
est level of health care expenditure among the rich nations (Singapore,
spending 3.3% of GDP) to one of the highest (Switzerland, spending
11.4% of GDP). They range from countries with long national histories to
those whose independence is a relatively recent phenomenon. Their con-
stitutions differ, as do their political cultures. Although all can be catego-
rized as rich countries, per capita income in the richest among the six is
almost twice that in the least well off.
But it is, of course, precisely these variations which make the one char-
acteristic shared by all six so remarkable. They all have comprehensive
health care systems covering the entire population. So the first lesson that
can be drawn from this study is that economic determinism is not helpful
when explaining the performance of developed health care systems.
Singapore with the highest per capita income is also the most frugal health
care spender. But conversely, the six also provide a warning against ethnic
over-explanation in cultural terms. So while it is tempting to explain
Singapore’s remarkable performance in terms of “Asian values” — such
as the emphasis on family self-reliance — the very different course taken
by Taiwan would suggest caution in using this explanatory variable.
On the face of it, of course, there are other similarities. The language
of choice and competition has become international in discourse about
health policy. It has been invoked in policy debates in all six countries,
as elsewhere. But the way it is interpreted, and the degree to which it
influences policy outputs, varies from country to country. Ideas can slip
across frontiers easily, but institutions are national. If there is any com-
mon theme to emerge from the six country studies, it is the extent to

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Foreword

which institutions constrain and shape policy making: While they do not
determine outcomes, they do set the limits of what is possible. On the one
hand, there is the case of policy making in Singapore, a seemingly irre-
sistible and smooth evolutionary process made possible by what is a
unique example of single party rule in a democratic polity. On the other
hand, there is the case of Switzerland, which remains as an example of a
country with multiple veto points (as famously documented by
Immergut) where policy making is an obstacle course. But once again the
studies provide a warning against facile determinism: The case of
New Zealand shows that while institutions do matter to the extent that
they permit (or block) rapid policy reverses, they cannot explain the
direction of the changes that follow.
So much for ideas and institutions. What about interests? Here the
country studies prompt an intriguing puzzle. There is no systematic analy-
sis of the role of interest groups in policy making or implementation, sug-
gesting that they do not play much of a part. Indeed in the case of the
Netherlands, the study explicitly notes a decline in the role of interests.
Only in New Zealand does the medical profession appears to have been
influential, which prompts the question as to why that country is an excep-
tion. And there is, of course, a larger question. Interest groups, and the
medical profession in particular, have traditionally been the focus of spe-
cial attention in comparative health care analyses. Why has this changed?
Is it because the medical profession and other interest groups have lost
ground in the policy arena or because academic fashions have changed or
because their influence is to be traced not so much in policy formulation as
in policy implementation? And the case of Taiwan, where the medical pro-
fession played no role in the creation of the health care system but is now
beginning to flex its muscles, prompts a further speculative conclusion:
Which is that the role of policy in creating scope for interest groups may
be at least as important as the role of interest groups in shaping policy.
Throughout this study the emphasis is as much on how policies work
out in practice as on their genesis. It is an approach which pays handsome
dividends and provides some notable cautions against accepting conven-
tional assumptions at face value. In particular, the evidence tends to

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Foreword

question the assumption that consumer choice (plus provider competition)

will necessarily be the engine driving systems to ever greater efficiency.
In the Netherlands, individual consumer choice has been statistically
almost invisible; in Switzerland consumers stick with their insurers even
when other plans offer lower premiums for the same basket of benefits.
Loyalty is the norm. Further, competition may actually reduce consumer
choice if insurers contract selectively with fewer providers. Does all this
matter, however. Another intriguing question looms up: Could the threat
of consumer exit be enough to produce the desired result ?
This, then, is a study which provides evidence, questions received
wisdom and prompts new questions. All of which should encourage
the potential reader to plunge in. The experience will be a rewarding one.

Rudolf Klein
Emeritus Professor of Social Policy
Bath University
Visiting Professor
London School of Economics

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Acknowledgements

The editors of this book would like to acknowledge three different

organizational events that inspired this undertaking. The first are the series of
conferences on health care reforms at the Ditchley House in Oxfordshire,
England in the early 1990s. Those meetings brought together government
officials, politicians, academics and other experts from the United
Kingdom, The United States and some other countries. They also pro-
vided a platform for well-structured debate on current health reform
issues. Some of the participants at the Ditchley House conferences who
were inspired to continue the health reform debate in another forum,
went on to initiate the so-called Four Country Conferences and formed a
Steering Committee: Ted Marmor from the U.S. Michael Decter and
Carolyn Tuohy from Canada, Martin Pfaff from Germany and Kieke
Okma from The Netherlands. Those meetings, sponsored by the govern-
ments and other agencies of each of the four countries (and in one case,
the Australian government as well), took place between 1995 and 2005.
The Four Country Conferences focused their debate issues on health pol-
itics in the United States, Canada, Germany and The Netherlands (in a
later stage, the editors decided to add the United Kingdom as an impor-
tant source of policy inspiration). A selected number of conference
papers became the base for a book to be published by Yale University
Press (at the time of this writing, the book manuscript is with the pub-
lisher’s for printing). This book discusses both methodological issues of
cross-national comparison as well as substantive policy areas, including
hospital care, primary care, pharmaceutical policies and long-term care
for the elderly. The idea for this comparative book is to include a limited
number of countries (small countries bordering large ones) with similar

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Acknowledgements

structural features of their health politics, facing similar policy problems

and seeking solutions in a similar range of options within their own
country-specific health policy arena.
The third venue that inspired the editors of this book was a meeting
of a health policy group of the German Bertelsmann Foundation held in
Helsinki in 2006. Here, the two editors of this volume (representing
smaller countries themselves) met and agreed to collaborate on research
that would focus on smaller countries’ health reform experiences. Some
other participants at that meeting joined in the project, too. It first resulted
in an article about the health reform experiences of Chile, Israel,
Singapore, Switzerland, Taiwan and The Netherlands (accepted by the
Journal of Comparative Policy Analysis). Next, this collaborative effort
expanded to include New Zealand as well. The editors thus acknowledge
the Ditchley House Foundation, the series of Four Country Conferences
and the Bertelsmann Foundation as their inspirational sources.
Next, the editors would like to express their gratitude to Meryl
Schwartz for her extensive editorial support. Meryl has worked hard to
transform raw drafts into eloquent language and also helped to collect and
present the data in the statistical Appendix to this book. We also like to
thank Sook-Cheng Lim of World Scientific Publishers in Singapore who
patiently accepted delays and remained very supportive of the project.
Finally, the editors acknowledge that without the enthusiastic support
and contributions by their co-authors they would not have been able to
cook this book, so to say, within the surprisingly short period of time of
less than two years.

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About the Authors

Kieke Okma received her PhD from the University Utrecht in 1997. She
has worked with a variety of government agencies in The Netherlands and
abroad for over 25 years. Since 2004, she has lived in New York and works
as an international health consultant and academic. She is Associate
Professor (adjunct) at the Wagner School of Public Services, New York
University and Visiting Professor at the Catholic University, Leuven. She
is on the editorial boards of Health Policy, the Journal of Health Politics,
Policy and Law and the Journal of Health Services, Research and Policy.
Kieke Okma has lectured widely and published on a broad range of health
policy issues, including health politics, and international comparison.
Recent publications include “Recent Changes in Dutch Health Insurance:
Individual Mandate or Social Health Insurance?” (Paper), Annual Meeting,
National Academy of Social Insurance, 2008; “Comparative Perspectives
on National Values, Institutions and Health Policies” (with Theodore R.
Marmor and Stephen R. Latham) in Sociology of Health and Illness, C.
Wendt, ed. 2006; “Comparative Perspectives and Policy Learning in the
World of Health Care” (with T.R. Marmor and R. Freeman); “Health Care
Systems in Transition of the World Health Organization” (with T.R
Marmor, book review essay); “The Method of Open Co-ordination: Open
Procedures or Closed Circuit?” European Journal of Social Security, 2002;
“What is the Best Public-Private Model for Canadian Health Care?”
(Paper), Montreal: Institute for Research on Public Policy, 2002.

Luca Crivelli received his PhD in Economics from the University of Zurich
and is currently Professor of Economics at the University of Applied
Sciences of Southern Switzerland and Adjunct Professor at the University
of Lugano. Since 1999, he has been director of Net-MEGS, a masters pro-
gram in health economics and management organized by the University of

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About the Authors

Lugano, and since 2005, he has been a member of the extended management
board of the Swiss School of Public Health. In 2004, he joined the interna-
tional health policy and reform network sponsored by the Bertelsmann
Foundation as an expert and policy analyst for Switzerland. From 2004 to
2007, he was part of the advisory committee of the Swiss conference of
cantonal health ministers covering the ongoing reforms of Swiss health
insurance. Crivelli has published peer-reviewed articles on cross-border
care (Swiss Journal of Economics and Statistics), regulation of pharmaceu-
tical markets (Journal of Regulatory Economics), federalism and health
expenditure (Health Economics), efficiency of health care institutions
(International Journal of Health Care Finance and Economics) and reforms
of health insurance in Switzerland (Revue française des affaires sociales).

Toni Ashton (PhD) is an Associate Professor in Health Economics and

Director of the Centre for Health Services Research and Policy in the
School of Population Health, University of Auckland, New Zealand. Her
primary field of research and publication is in the analysis of the organi-
zation and funding of health systems with a special focus on health care
reform. Having worked in the field for over 20 years, she has been a mem-
ber of a number of government working parties covering various aspects
of health policy, and is on the editorial board of four academic journals.
She has also consulted extensively for international agencies such as
WHO and OECD, and nationally for government agencies, health profes-
sional bodies, and non-government organizations.

Iva Bolgiani received her PhD in Economic and Social Sciences from the
University of Geneva and now works as a scientific consultant at the
Sezione sanitaria in the Canton of Ticino, with a special focus on quality
improvement programs for hospitals and contracting with the public can-
tonal hospitals. She is a member of the teaching staff at the Universities
of Geneva, Lausanne and Lugano. She has served as external expert of the
national commission on health prevention and communication and she is
a member of several inter-cantonal commissions working on health policy
issues at the national level. She has published several articles in both

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About the Authors

Swiss and international journals, and one book. She also collaborates with
the HPM program of the Bertelsmann Foundation.

David Chinitz received his BA with the Bennett Prize in Political Science
from Columbia College in 1973, and his PhD in Public Policy Analysis
from the University of Pennsylvania in 1981. After moving to Israel in
1981, he has held positions as Head of the Division of Social Sciences in
the Israeli Ministry of Science; Senior Researcher at the JDC/Brookdale
Institute in Jerusalem; and Senior Lecturer in the Department of Health
Policy and Management of the Hebrew University-Hadassah School of
Public Health. He has been a visiting scholar at the Schools of Public
Health of Columbia University and the University of California, Berkeley,
as well as the Wagner School of Public Service, New York University. He
is immediate past Scientific Chair of the European Health Management
Association and a member of the Management Board of the International
Society for Priorities in Health Care, and serves on the editorial board of
a number of health and public health journals and as a consultant to the
World Health Organization. David Chinitz has edited several books and
authored numerous articles and chapters on comparative health systems,
health policy and regulation, and quality assurance.

Rudolf Klein, CBE, was born in Prague. After graduating from Oxford, he
spent the first half of his career as a journalist with the London Evening
Standard and The Observer. From 1978 to 1998 he was Professor of Social
Policy at Bath University and is currently Visiting Professor at the London
School of Economics and the London School of Hygiene. He is a Senior
Fellow of the British Academy, a Fellow of the Academy of Medical
Sciences, and a Foreign Associate of the Institute of Medicine. Apart from
The New Politics of the NHS (5th edition, 2006), he has written several
books about accountability, consumer representation and rationing, as well
as many articles about public policy in academic and other journals.

Meng K Lim is Associate Professor of Health Policy and Management

at the Yong Loo Lin School of Medicine, National University of

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About the Authors

Singapore. He is also the Academic Director of the Master of Business

Administration (Healthcare Management) Program at the NUS Business
School and Director of Public Health of the Association of Pacific Rim
Universities World Institute (http://www.apru.org/awi). A physician by
training, Dr. Lim was Chief of the Singapore Armed Forces Medical
Corps (1986–1995); Founding Director of the Defense Medical Research
Institute (1994–1997), and Chief Executive Officer of the Health
Corporation of Singapore (1997–1999). He has served on several hospital
boards and numerous expert commissions. Dr. Lim has published over
80 scientific articles in international, peer-reviewed journals — including
New England Journal of Medicine, Health Affairs, Health Policy, Medical
Care, Quality and Safety in Health Care, Journal of Health Policy,
Politics and Law, British Medical Journal, and British Journal of Public
Health Medicine. He is Editorial Board Member of Health Services
Research, Health Research Policy and Systems, and Asian Journal of
Health and Information Sciences. He is also Scientific Committee
Member of the International Academy of Aviation and Space Medicine.
Internationally, Dr. Lim has represented Singapore on the WHO Western
Pacific Advisory Committee on Health Research and the International
Network on Healthcare Reform. He has also consulted extensively for the
World Bank, WHO, Asian Development Bank, as well as the Ministries of
Health of Singapore, China, Vietnam, Thailand, Indonesia, Malaysia,
Brunei, Hong Kong, Iran, Lebanon, Egypt, West Bank, Gaza, Kuwait, and
Bulgaria. Among his awards are the Republic of Singapore’s Public
Service Star and the Public Administration (Silver) Medal. In 2004, he
received the NUS Special Commendation Award for Teaching Excellence.

Hans Maarse is an expert in health policy and administration. After his

receiving his PhD in political science, he worked for 10 years at the Faculty
of Public Administration at Twente University. Since 1986, he has been a
professor in the Faculty of Health Sciences at the University of Maastricht.
He has consulted frequently for the WHO and the World Bank. His current
fields of interest are the impact of the EU on health policy-making, com-
parative health systems analysis, and market reforms in healthcare systems

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About the Authors

(in particular, The Netherlands). He has recently published on these top-

ics in the Journal of Health Politics, Policy and Law, Health Care
Analysis, Health Policy, the European Journal of Health Economics,
EuroHealth, Journal of Medicine and Philosophy, BMC Health Services
Research, Intereconomics and in several books on healthcare policymak-
ing. He is also a member or chairman of the supervisory boards of several
healthcare provider organizations in The Netherlands.

Rachel Meislin is a recent graduate of the University of Pennsylvania

with a BA in Health and Societies, and has interned as a research associ-
ate at the Department of Health Policy and Management, School of Public
Health, Hebrew University-Hadassah, Jerusalem. She is currently pursu-
ing a career in medicine.

Tsung-Mei Cheng is an expert on comparative health systems with an

emphasis on Asian countries. Cheng writes and lectures internationally on
topics ranging from single payer systems, health systems change, health
care quality, financing, pay for performance focusing on East Asian health
systems, to the impact of the WTO and GATS on national health policy.
She is the co-founder of the Princeton Conference, an annual national con-
ference on health policy that brings together the U.S. Congress, govern-
ment, and the research community on issues affecting health care and
health policy in the United States. Cheng is an adviser to the China Health
Economics Institute, the official government think tank for health policy
under China’s Ministry of Health charged with, among other things, con-
ducting policy-oriented research on national health care development strat-
egy and health care system reform and provide policy recommendations to
policy makers. She is also an advisor to NICE International, an agency of
the National Institute for Health and Clinical Excellence that advises the
National Health Service (NHS) of the United Kingdom on NHS coverage
decisions and clinical and public health guidelines, as well as a member of
the International Advisory Group of Academy Health, the US-based pro-
fessional association of health services researchers, and a board member of
the America-China Medical Association. Cheng was an adviser in 2003 to

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About the Authors

the Strategic Review Board of the Science and Technology Advisory

Group (STAG), a body charged with advising the Office of the Premier of
Taiwan, on the development of science and technology. Currently she is
working on cross-national comparisons of health systems in East Asia
focusing on health reforms in China and Taiwan. Cheng is the host, writer,
and executive editor of the “International Forum,” a Princeton University
television program on international affairs focusing on global political,
economic, security issues as well as issues concerning global health.

Tim Tenbensel is a senior lecturer in health policy at the School of

Population Health, University of Auckland, New Zealand. He is assistant
editor of Social Science and Medicine, and a member of the Advisory
Board for the Policy & Politics Journal. Recent publications include
“How Do Governments Steer Health Policy? A Comparison of Canadian
and New Zealand Approaches to Cost-Control and Primary Health Care
Reform,” Journal of Comparative Policy Analysis 10, no. 4 (forthcom-
ing). “Public Health Sciences and Policy in High Income Countries” (with
Peter Davis) In Oxford Textbook of Public Health, eds. Roger Detels,
Robert Beaglehole, Mary-Ann Lansang, and Martin Guilford. Oxford:
Oxford University Press (forthcoming). “Where There’s a Will, Is There
A Way?” (with J. Cumming, T. Ashton, and P. Barnett), Social Science
and Medicine 67, no. 7: 1143–1152, 2008. “Decentralizing Resource
Allocation: Early Experiences with District Health Boards in New
Zealand” (with T. Ashton, J. Cumming, and P. Barnett) Journal of Health
Services Research and Policy 13, no. 2: 109–115, 2008. “Policy
Knowledge for Policy Work.” In The Work of Policy: An International
Survey, H. K. Colebatch, ed. Lanham: Lexington Books, 2006. “Interest
Groups.” In New Zealand Government and Politics, Raymond Miller, ed.
4th edition. Auckland: Oxford University Press: 525–535, 2006.
“Multiple Modes of Governance: Disentangling the Alternatives to
Hierarchies and Markets,” Public Management Review 7, no. 2: 267–288,
2005, 2004. “Does More Evidence Lead to Better Policy? The
Implications of Explicit Priority-Setting in New Zealand’s Health Policy
for Evidence-Based Policy,” Policy Studies 25, no. 3: 189–207, 2004.

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Introduction

Kieke G. H. Okma and Luca Crivelli

This book presents a diagnosis of the health reform experiences of

six small and midsize industrial democracies — Israel, The Netherlands,
New Zealand, Singapore, Switzerland, and Taiwan — during the last two
decades of the 20th century.1 The countries span the globe, hailing from
Asia, the Middle East, and Europe. The study seeks to contribute to cross-
national policy learning by structured multicountry research. It looks at
the health reform experiences of six quite different health care systems. In
that sense, it represents a “most different system design” (Marmor, 1988),
under a common analytical framework.
At first glance, the countries selected for this comparative study do
not have much in common. They are located on different continents and
vary greatly in size, population, ethnicity, and historical background (see
the tables in the Appendix for statistical data on size, populations, income
levels, economic growth, and health expenditure). The countries differ in
dominant cultural orientations and economic circumstances, with very
different traditions and styles of socioeconomic and fiscal policy-making.
1
This study has its roots in an article for the Journal of Comparative Policy Analysis that
the authors wrote in 2008. That contribution became the base for this more extended study.
During the process of transforming an article into the book format, we added New Zealand
as an interesting laboratory for change in health governance. Unfortunately, due to unfore-
seen events, we had to drop Chile as a full chapter in this volume. However, given the
striking experiences in Chile — in particular, the sweeping policy shifts after the military
takeover in 1973, and again after the return to democracy in 1990 — we refer to that
country in referencing “exclusionary policy-making.” We would like to express our
gratitude to Eliana Labra for her collaboration.

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K. G. H. Okma & L. Crivelli

However, they also have some important features in common. They

all are small-to-midsize industrialized democracies with open economies.2
They share the general policy goal of providing universal access to
good quality health care, and all six have sought to broaden insurance
coverage while restraining public expenditure. Over time, they have faced
similar fiscal strains (with the notable exception of Singapore), growing
(and changing) demand for medical services, and shifting perceptions of
the role of the state in society. Moreover, all have discussed a similar
range of reform options, and all have enlarged access to health care serv-
ices by expanding (public and private) health insurance.
Another common feature of the group is that — illustrating the need to
make a careful distinction between policy as intentions or plans and policy
as implemented change (Palmer and Short, 1989) — they actually under-
took major reforms in the last two decades, rather than just discussing pol-
icy intentions. Public discontent with existing arrangements, combined with
the availability of policy options and political willingness to act, created
“windows of opportunity” (Kingdon, 1984) for such change. Finally, and
perhaps most importantly, the cases selected fall somewhat “under the radar
screen”: they are not usually included in international comparative studies

2
One question we have not addressed extensively in this book is: What counts as a “small”
or “medium”-size country? Most international comparative studies take one or more of the
world’s largest industrialized countries as the main comparator: the United States, the United
Kingdom, Canada, Germany, France, and sometimes other OECD member states. We use the
term “small and medium-sized” to indicate countries that clearly do not belong to that group.
In the introduction to his grand oeuvre, Rich Democracies, Harold Wilensky (2002)
discusses the size issue. He argues that rather than the actual size in terms of the population
or geographic area, it is the complexity of administration that matters. The countries studied
in this book all have long traditions of public health care funding and contracting, under a
variety of (complex) administrative arrangements. However, there is one other common
feature of policy-making in small countries that is worth noting: the small size of the market
and policy arena creates strong barriers to exit. First, there is much personal overlap in the
health care field (such as board membership of hospitals or health insurance combined with
political functions or expert advisorships); in the health policy arena, the major players know
each other personally. Moreover, health care is mostly “local.” The findings of this study also
confirm that most people do not want to travel long distances to obtain medical care, nor can
they move to another town or region easily. This also limits the “consumer exit.”