International Journal for Quality in Health Care 16:265-266 (2004)
International Journal for Quality in Health Care vol. 16 no. 3 © International Society for Quality in Health Care and Oxford University Press 2004; all rights reserved
Book review |
Regulating Healthcare: A Prescription for Improvement?
Kieran WalsheOpen University Press, 2003; 0-33-521023-6; 192 pp; $112.95 Hb, $37.95 Pb
The USA is as close to a market-based health care economy as you will find in any developed country. The UK is more or less as close to a wholly state-funded and -provided health care system as can be found in the developed world. Nevertheless, two observations apply across the two countries’ health care systems. Firstly, the systems are characterized by an extraordinary degree of regulation, and secondly, quality-of-care problems are quite prevalent in both countries. These two observations serve as the basis for a new book by Professor Kieran Walshe that addresses one of the fundamental questions facing the US and UK health care systems: does greater regulation improve the quality of care?
This is not a straightforward question for several reasons. Firstly, health care regulations are quite diverse along several dimensions. Secondly, the underlying rationale for health care regulation is not always to improve performance, i.e. regulations may exist to serve the interests of the regulator or various provider groups. Thirdly, there is not a standard method for evaluating regulatory performance, especially in light of the disparate forms of regulation present in the health care sector. And finally, there is often very little empirical work linking the costs and benefits of regulation.
Professor Walshe considers all of these issues in analyzing the role of regulation in the US and UK health care systems. Basically, seven characteristics of regulation are identified that may influence health care performance: the nature of the regulating organization, regulatory goals and objectives, scope of the regulation, regulatory model (i.e. deterrence or compliance), methods used to communicate direction to regulated organizations, methods of detection, and methods of enforcement. The primary contribution of this book is to analyze how these regulatory characteristics influence health care performance in the US and UK systems.
The book is structured as follows. Chapter 1 provides an introduction to the subject matter. Chapter 2 describes the theoretical framework used to evaluate regulatory performance. Chapters 3 and 4 describe how health care is regulated in the USA and UK, respectively. Chapter 5 evaluates the effect of regulation on health care performance in the US and UK systems based on the theoretical model established in Chapter 2. Finally, Chapter 6 discusses the future of health care regulation in the US and UK.
There are multiple strengths associated with this approach. The analysis of both the US and UK health care regulatory systems is quite novel and adds significantly to the generalizability of the book’s conclusions. One could argue that Professor Walshe still ‘only’ has two data points, but this perspective would miss the number and diversity of regulations considered within both the US and UK systems. Certainly, there exists some clustering due to each country’s regulatory culture, but the consideration of both the US and UK should not be overlooked as an important contribution of this book. The analysis of other countries’ health care regulatory systems would be a useful extension of this current work.
The theoretical framework introduced in Chapter 2 is the backbone of the book and allows Professor Walshe to draw conclusions across two different health care systems with various regulatory models. For example, a common framework is used to evaluate both the National Institute of Clinical Excellence (NICE) in the UK and the Joint Commission for the Accreditation of Healthcare Organizations (JCAHO) in the US. The former is a special health authority established to provide guidance on current ‘best’ practice in the National Health Service and the latter is a non-governmental voluntary regulator set up to provide accreditation to US hospitals and nursing homes. The differences in NICE and JCAHO are significant, but the conceptual framework facilitates the evaluation of both in an objective and rigorous manner.
Although Professor Walshe acknowledges the difficulty in identifying regulatory principles that are universally effective, another contribution of this book is that it helps to challenge the manner in which regulation is often employed in the US and UK. For example, US health care regulation tends to be federally operated and comprehensive, using explicit standards that are applied rigidly without favor or discretion, with tough penalties and big sanctions for non-compliance. Professor Walshe notes that this model rarely works well. Rather, the principles of responsive regulation—contingency, hierarchy, flexibility, tripartism, parsimony, and empowerment—are more likely to be effective. An interesting question to consider is why health care regulators continue to employ less effective interventions.
As we move forward in the study of health care regulation, Professor Walshe is correct to point out the need for further analysis. I envision potential extensions in the theoretical and empirical analysis of health care regulations. From a theoretical perspective, the recent growth in the field of political economy is an exciting development towards the analysis of regulation. Many economists and non-economists alike have recognized that the presence of market failure may not be the preferred explanation for government intervention in markets [1,2]. Rather, political economists have argued that regulation will be biased towards better-organized groups (which are more effective at delivering political support) and those groups with more to gain from legislation (so that they are willing to invest resources to acquire political support). The application of this framework to health care regulation in the analysis of quality-of-care issues would be an important extension of Professor Walshe’s existing framework. Moreover, it may provide some direction as to why regulators continue to adopt less effective regulatory strategies.
In terms of the empirical work needed, Professor Walshe points out the dearth of studies evaluating the returns to greater investment in regulation. That is, there has been very little effort to link the costs of regulation with any perceived benefits in greater health care performance. For example, Professor Walshe notes that in the year 2000 the US government spent $382 million dollars on federal and state agencies regulating nursing homes, and of course this cost figure does not account for the significant private costs to nursing homes of adhering to the regulatory guidelines. In spite of the high cost of US nursing home regulation, we know relatively little about its impact on health care performance in terms of the quality-of-care and quality-of-life within nursing homes. Nevertheless, there are continued calls in the US for increased nursing home regulation due to persistent quality-of-care issues [3]. Professor Walshe is correct in advocating for a rigorous evaluation of the costs and benefits of health care regulation before moving forward.
In sum, this book provides an interesting analysis of the role of regulation in the US and UK health care systems. It will provide the reader with a sound foundation upon which to explore further the underlying causes and implications of health care regulation in the US, UK, and elsewhere.
Department of Health Care Organization and Policy, University of Alabama at Birmingham, AL, USA
References
- Viscusi WK, Vernon JM, Harrington JE. Economics of Regulation and Antitrust, 3rd edn. Cambridge, MA: MIT Press, 2000.
- Zerbe RO, McCurdy, HE. The failure of market failure. J Policy Anal Manage 1999; 18: 558–578.[CrossRef]
- Institute of Medicine. Improving the Quality of Long-Term Care. Washington, DC: National Academy Press, 2001.
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