Health policy is one of the most debated and analysed areas of social policy internationally, and encompasses a multitude of seemingly disparate but in fact largely interrelated issues. For example, how should we motivate doctors to improve performance? What is ‘performance’, and how do we measure it? What is the impact of antitrust law on provider behaviour? How do we ensure that we attain the most benefit from our health care resources? What is ‘benefit’, why is it defined in the ways that it is, and how do we measure it? Can the implementation of World Trade Organization regulations produce legislation that favours public sector health care development?

This paper examines the interaction between public and private insurance in the context of the US Medicare program, which serves those aged 65 and older as well as the disabled who meet specific eligibility requirements. Specifically, the paper examines the extent to which increasing enrollment in Medicare managed care (which provides more comprehensive coverage than basic Medicare) influences premiums in the privately purchased Medicare supplemental insurance market (called ‘Medigap’). We employ a fixed effects instrumental variables approach to analyze the association between premiums charged by two large Medigap insurers and Medicare HMO penetration rates, examining over 60 geographic areas during the period 1994–2000. It is hypothesized that greater Medicare HMO penetration will lead to adverse selection into the Medigap market, resulting in higher premiums. The findings suggest a moderate upward effect on premiums, with elasticities ranging from 0.09 to 0.25. Controlling for other factors, moving from a 12% to a 22% Medicare HMO penetration rate would raise average Medigap premiums from $1,314 to $1,615. We discuss the implications of these results with respect to the design of national health care systems that include both public and private insurers.

There is a popular belief that drug launch is delayed in developing countries like India because of delayed transfer of technology due to a ‘post-launch’ imitation threat through weak intellectual property rights (IPR). In fact, this belief has been a major reason for the imposition of the Trade Related Intellectual Property Rights regime under the WTO. This construct undermines the fact that in countries like India, with high reverse engineering capabilities, imitation can occur even before the formal technology transfer, and fails to recognize the first mover advantage in pharmaceutical markets. This paper argues that the first mover advantage is important and will vary across therapeutic areas, especially in developing countries with diverse levels of patient enlightenment and quality awareness. We construct a game theoretic model of incomplete information to examine the delay in drug launch in terms of costs and benefits of first move, assumed to be primarily a function of the therapeutic area of the new drug. Our model shows that drug launch will be delayed only for external (infective/communicable) diseases, while drugs for internal, non-communicable diseases (accounting for the overwhelming majority of new drug discovery) will be launched without delay.

There has been much recent interest in the trade in human organs in India. This paper examines both the extent to which regulatory controls through the Transplantation of Human Organs Act (1994) are effective in curbing commercialization and the nature of the constraints on the effective implementation of this Act. The study, a politico-economic analysis of health sector regulation, is based on a stakeholder analysis drawing on the views of key decision makers, service providers, organ donors and recipients. The findings indicate widespread acknowledgement of an organs trade and highlight four major constraints on the effective implementation of the Act: the commercial interests of middlemen and service providers, the ambiguities and loopholes in the Act; the low monitoring capacity of the regulatory authorities, and the pressures and responsibilities exerted upon the Authorizing Committees. A feature of the Act is that its implementation is subject to a major incentive compatibility constraint – it is seemingly not in the interests of any of the key players, including the regulatory authorities, to restrict the organ trade. To some extent, this institutional problem is created by the specific nature of the regulatory intervention, and, as a consequence, measures involving straightforward redrafting of the regulation might go some way to addressing this incentive problem. Another solution may entail a ‘harm-reduction’ strategy involving a controlled trade where procurement and organ matching is carried out by a government agency (this would require, however, the prior resolution of the broader ethical question concerning the legitimacy of such trade).

After a long period of neglect, the issue of human resources for health (HRH) has recently emerged as a core component on the international health agenda, with policy makers increasingly eager to learn from experience elsewhere. This article investigates systematically the opportunities and challenges associated with the use of cross-national comparisons of HRH policies and practices. It reviews the evidence in favour of using international comparative studies on HRH, discusses emerging opportunities for developing a cross-national research agenda to guide HRH policies in Europe, and highlights obstacles which may hinder the implementation of comparative studies on HRH. While demonstrating many opportunities offered by the comparative approach to improve understanding of human resources processes in the health sector, this article also emphasizes the dangers of simplistic pleas for the transfer of human resource policies without taking into account the context-specific factors and the generative capacity of the social actors in the design and implementation of policy changes.

Most countries face high demands on their health care systems and have limited resources with which to meet them. Priority setting seeks to address these problems by proposing rules to decide which groups of patients or disease areas should secure favoured access to limited health care resources. The economic approach towards priority setting, particularly in the form of cost-effectiveness analysis, is commonly advocated. However, despite many decades of refinement of the technical and methodological issues arising from the use of economic evaluation in priority setting, decision makers continue to diverge frequently from the principles of economic evaluation. Our approach in this paper is to highlight the potential contribution of models of political economy to understanding what constitutes rational behaviour when agents operate within political and institutional constraints. We argue that there may be potentially greater benefits to be gained from exploration and analysis of priority setting using models based on concepts such as median voter and competing interest groups, than from further efforts to refine the techniques of economic evaluation.

Over the past quarter century or so there has been, in Peter Hall’s formulation (Hall, 1993), a paradigm shift in macro-economic policy making: a movement from a Keynesian mode of policy making towards one based on monetary theory. The latter was open to a variety of interpretations and has been modified in practice. However, there was clearly a transformation in the way we think about economic policy making. Is the same true of social policy? Has there been an equivalent paradigm shift in the way we think about social policy? The two books under review provide an opportunity for addressing this question.