Essays on the Government and the Market in Health Systems

Abstract

Health systems globally have both government and market agents. In the context of health systems, agents can include a range of entities such as individuals (patients, health care professionals), organizations (hospitals, insurance companies, pharmaceutical companies), and government bodies (ministries of health, regulatory agencies). The government and the market each offer their own advantages and disadvantages when it comes to fulfilling various objectives within health systems. A government-oriented centralized planning system that allocates resources directly to the population may be more equitable than the market, but are subject to government failures such as bureaucratic inefficiencies, political capture, and state monopolies. A free market produces an efficient allocation of goods, stimulates innovation through competition, but market failures from asymmetric information lead to anticompetitive behavior, inequitable outcomes, and inefficiencies. To achieve goals of equity, satisfaction and efficiency in health systems, it is important for policymakers to understand how to achieve an optimal mix of both sectors. This thesis shows these themes in the context of Malaysia.