Health care refers to the delivery of medical services and supplies. Its ultimate end is the preservation or improvement of human life and health. Its impact on those attributes is often highly variable. Individuals want to obtain health care that maximizes their health potential, and society wants to ensure equitable access to those services. These desires are reflected in massive expenditures on health care, both in terms of personal expenditures and forgone incomes as well as public investments in health insurance coverage and tax policy.
In theory, the competitive forces of market economies should operate to improve quality. Competition assumes a market with perfect information, homogeneous products (here, health care services and procedures), large numbers of suppliers and customers (health professionals and patients), and free entry and exit from the industry (Weiss, 1987).
These conditions are far from met in most health care settings. The complexities of diseases and their treatment, the limited availability of some services and equipment, and the fact that individuals cannot move easily between providers are just some of the factors that interfere with a market economy. The specialized training and continuing education that are required for most health care professionals are also barriers to entry and to change of providers.
Nevertheless, it is widely held that a system of market incentives-for example, consumer demand for a certain service and the movement of private insurers to reward good performance through lower costs-will tend to provide high-quality health care, provided that a market environment supports good information flow and that someone-patients, outside evaluators, clinician communities themselves-can recognize good and bad practice. This tenet has given rise to the movement toward releasing provider-specific outcomes, such as hospital mortality rates, and to the promotion of managed care as a means of improving quality.
A number of fundamental issues make the delivery of health care unique from other industries: the ill-defined nature of the product, uncertainty about its outcome, the dominance of nonprofit institutions in some segments of the industry, and the fact that the consumers of health care are both customers and patients (or, more precisely, recipients of services and beneficiaries of payments).
A basic problem is the absence of clear lines of accountability. The decisions that are made in a complex health care setting involve the balancing of competing values and interests-for example, between the need for professional expertise, the desire for cost reductions, and concerns about patient autonomy-and these decisions must be weighed against each other. The result can be confusion about responsibilities, in which even when sound clinical decisions are made and appropriate services are delivered with technical proficiency, poor outcomes may occur.