Munich Personal RePEc Archive

The advantages and disadvantages of needs-based resource allocation in integrated health systems and market systems of health care provider reimbursement

Gugushvili, Alexi (2007): The advantages and disadvantages of needs-based resource allocation in integrated health systems and market systems of health care provider reimbursement.

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Abstract

This paper reviews the vital health care resource allocation in integrated systems and contrasts it with the market-based health care resource provisions. It is believed that among several alternatives a method of centrally managed needs-based resource distribution is best suited for universally appraised code of “equal treatment of equals”. However, the main problem hides in identification and measurement of “need” and in economic effectiveness of the methodology. Supposedly, from the 1980s, as an innovative approach, the market system of health care provider reimbursement had to resolve the problems associated with centralised needs-based resource allocation, maintaining the main achievements and improving the effectiveness of the systematic distribution. Nonetheless, as this paper shows, so far there is little evidence that the market-based health care provider reimbursement advances the allocative performance of various health care systems.

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