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Revista Panamericana de Salud Pública

On-line version ISSN 1680-5348Print version ISSN 1020-4989

Rev Panam Salud Publica vol.3 n.5 Washington May. 1998 




To the editors:

Sirs: Just three years shy of the new millennium, we are witnessing social and economic trends of increasing consumer individualism, self-determination, and sovereignty. The market is exalted as the most efficient mechanism for distributing resources, and consumer choice appears to take precedence over collective interests. Due to these profound social transformations, the health sector is under pressure to satisfy the demands of individual clients rather than the needs of larger population groups. Should public health services cater to individual clients or serve the collective and seek to improve objective health indicators? These alternatives are not necessarily complementary; in fact, they are often opposed.

At the center of this controversy is a debate over whether it is advisable to abandon the financing and provision of health services to the free play of supply and demand. There appears to be a natural tendency toward taking this course in the context of increasing economic liberalization. However, health services provision requires a different sort of analysis than that required by production and distribution of other goods and services. The market for health services has imperfections that justify State intervention. First, health products are not comparable among themselves, and the results of using them cannot be guaranteed. In addition, the physician, acting as an intermediary in the commercial provision of services, introduces market distortions. Furthermore, the information gap between provider and consumer is much larger in health than in other types of markets. On the other hand, some health interventions produce positive externalities for society which are not subject to commercialization. For example, vaccinating a child has benefits for the child's neighbors that are not included in any transaction. All these considerations speak to the impossibility of fixing stable prices for goods and services in a health marketplace, and hence justify State financial and regulatory participation.

Owing especially to the information imbalance between provider and consumer, clients' demands for health services are heavily influenced by the medical-industrial complex. This complex favors curative medicine based on advanced technology, and, not surprisingly, popular ideas of what is needed ¾ hospital construction and drugs and technologies for the terminally ill. Preventive services generate less demand. The reasons are that their benefits are observable only over the long run, and the particular individuals who benefit cannot always be clearly identified. Moreover, prevailing medical practice does not universally share an interest in health promotion. Uninformed or tendentiously informed, the public demands curative interventions based on advanced technology. Even business hours and ancillary services in hospital stays appear to carry more importance than the concrete results of interventions.

Because most users of health services lack the ability to make clinical decisions, they delegate this responsibility to their doctors, who act as their agents. However, health professionals have a conflict of interest: their wish to maximize income conflicts with the patient's desire to get well at the least possible cost. This being the case, should a nation's health authorities entrust public health to a market driven by extremely disoriented demand, or should they take responsibility for regulating service provision and improving health indicators by the most cost-effective means?

The purpose of health services is not to produce satisfaction at the moment of consumption but to improve the health status of the clients. Consequently, it makes no sense to furnish ineffective services, no matter what the demand.

Because the free market does not adequately distribute health goods and services, the State assumes an important role as planner. It is responsible for designing and promulgating a set of health services to be delivered to the population by the various providers. In the public sphere, this means designing basic service packages that standardize publicly provided services and regulate private services. Such basic packages, even when submitted for public approval ¾ as in Oregon, United States ¾ are strongly influenced by the experts who make the proposal.

In countries that have never used rigorous methods to establish the effectiveness of their health interventions, as most Latin American countries have not, these packages correspond more closely to clients' spontaneous demands and to the interests of the industrial complex than to the criterion of social benefit.

For all these reasons, the first task in fully exploiting resources dedicated to health services appears to be refining the criteria that guide health planners in the allotment of financial resources. Whether by using methodologically laborious procedures such as the calculation of disability-adjusted life years (DALY) proposed by the World Bank, or by using methodologies more suited to the information systems of developing countries, health planners must determine the affordable combination of interventions that yields the greatest possible impact on the health of the population. At the same time, public health authorities must educate the population concerning the social benefits produced by this package so that, little by little, popular demand comes to approximate the package that has the greatest positive impact on health, either in terms of DALY or some other indicator of effectiveness.

The State should promote the orientation of health services toward those interventions that yield the greatest improvement in the society's health based on objectively measured health indicators. Health services that are efficient, socially acceptable, and compatible with current social trends can only be produced through the highest technical precision and a broad public discussion that confronts the scientific arguments in favor of the technical proposal with social values and preferences that call for the proposal's modification. The final product of this participatory process will be agreement upon a set of interventions that may not be the most efficient technically, but that is socially valid.

While promoting this process, the State must develop an adequate public education program that will enable users to make well-informed decisions in the public as well as in the private sphere. Only when providers and consumers have comparable information can client preferences and technical criteria together ensure the greatest social benefit.


Edgar Barillas
Consultant in International Health
GSD Consultores Asociados
36 Ave. 1-39 zona 7
Guatemala 01007