Andy Gray
Economists of the 1950s referred to public “goods” as those that were produced by the State, made available to all, and that could be priced in terms of the level of taxation required to finance their production. However, it soon became evident that many such “goods” or services were subject to the “impurities” of market forces. “Club” theory emerged as a way to explain how user fees or other charges could exclude members of the public from access to some of the products of the public sector. The British political economist Frey talks of a cycle of demand for public goods – a rise in disequilibrium (dissatisfaction with existing supply) is articulated as a demand, to which government reacts by creating a new mix of goods. However, as Parsons points out, “this new mix provides the source of later dissatisfaction”, completing the cycle. One of the first moves of the post-1994 Department of Health was to remove user fees at primary care level. Such a purist approach is at odds with much evidence from the developing world, notably the Bamako Initiative. Even in the minds of many consumers of public health “goods”, there is a direct correlation between cost and quality. Perhaps it is time, without stirring the demons of Hayekian individualism or Friedmanite monetarism, to examine whether the ban on user fees forms part of the fundamental “deep core” of our Health policy, or is merely a secondary aspect or detail. A cursory look at the pharmaceutical expenditure of our larger public hospitals will show to what extent the shift to primary care facilities has been bypassed. First contact at a tertiary institution is still the norm rather than the exception. Making bypass or user fees a more visible part of the product mix may create “clubs”, but failure to do so will surely sow the seeds of disequilibrium.
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