Skip to main content

Advertisement

Log in

The Rise of Independent Regulation in Health Care

  • Original Article
  • Published:
Health Care Analysis Aims and scope Submit manuscript

Abstract

In all countries where health care access is considered a social right, regulation is both a tool of performance improvement as well as an instrument of social justice. Both social (equity in access) and economical (promoting competition) regulation are at stake due to the nature of the good itself. Different modalities of regulation do exist and usually new regulatory cycles include the creation of stronger regulatory agencies. Indeed, health care regulation is rising steadily in most developed countries as a consequence of the introduction of the New Public Management perspective to provide essential public goods.

Health care is delivered by different organisations with very different cultural backgrounds—public and private (profit and non-profit)—that should be accountable for their decisions. Control by regulatory agencies is instrumental to accomplish this goal. However, there is some dispute with regards the degree of regulatory autonomy. The objective of this paper is to determine if independent regulatory agencies (IRAs) are effective in carrying out health care regulation. The authors apply Walshe’s analytical framework to the Regulatory Authority of Health (Portugal) to answer the question if independent regulation works.

In conclusion, the two year experience of the Regulatory Authority of Health is important not only because the primary goals of independent regulation were achieved but also because this authority is now a full partner in the health care sector. However, independent agencies need to develop strong mechanisms of accountability because good regulatory governance is the paradigm of this institutional innovation.

This is a preview of subscription content, log in via an institution to check access.

Access this article

Price excludes VAT (USA)
Tax calculation will be finalised during checkout.

Instant access to the full article PDF.

Institutional subscriptions

Similar content being viewed by others

Notes

  1. Portuguese health system, for instance, intends to be a global model of rationalised care, centred on the general practitioner placing high emphasis on early intervention and guaranteeing the integration and continuity of care. The Portuguese health system represents 10% of the Gross Domestic Product and has two main components: a) the National Health Service (NHS), universally accessible, and publicly financed through the social solidarity (taxes) of citizens (the public expenditure in health care represents 65% of the overall health budget and is processed directly from the global budget), b) subsystems and private practice (including commercial insurance schemes and out-of-pocket payments) account for 35% of the overall health budget.

  2. The Portuguese health care reform is described by the OECD (Organisation for Economic Co-operation and Development) [11] as follows: “An ambitious reform to increase efficiency of the Portuguese health care system was launched in 2002. In contrast to previous attempts of gradual reforms, which were never fully implemented, the strategy has been to create a big bang in the health sector, making changes essentially irreversible. The reform has two main aims: to deliver better-quality public health services than at present but at no higher cost; and to reduce the underlying growth rate of public health care spending over the medium term. New legislation approved includes the separation of functions of regulation, financing and provision of health care services; setting up new models of financing for providers, which impose harder budget constraints; the introduction of incentives towards productivity, management and quality improvement; the possibility for the private sector to play a larger role in service provision; and the promotion of generic drugs.” (p. 2).

  3. The financing of this independent agency is through taxes charged directly to all health care providers in proportion to the number of professionals working at the regulated organisation.

  4. In principle there is no reason why well-known theories of corporate governance—agency, stakeholder and transaction cost economics theories—should not be used in the regulatory context. Indeed, they should provide a theoretical framework for regulatory governance [4]. The distinctive feature of corporate governance is the promotion of an adequate system of control. Dealing with the relations between the management of an organisation with its managers, shareholders and other stakeholders, corporate governance guarantees that an organisation is managed in accordance with the best interests of all stakeholders. It also aims to encourage transparency and accountability in its management and performance.

References

  1. Ayres I, Braithwaite J (1992) Responsive regulation. Transcending the deregulation debate. Oxford University Press, Oxford

    Google Scholar 

  2. Baldwin R, Cave M (1999) Understanding regulation. Theory, strategy and practice. Oxford University Press, Oxford

    Google Scholar 

  3. Boyer R, Saillard Y (2002) Regulation theory. The state of the art. Routledge, London

    Google Scholar 

  4. Colley J, Doyle J, Logan G, Stettinius W (2003) Corporate governance. The McGraw-Hill Executive MBA Series, London

    Google Scholar 

  5. Crew M (1999) Regulation under increasing competition. Kluwer Academic Publishers, Boston

    Google Scholar 

  6. Daniels N, Light D, Caplan R (1996) Benchmarks of fairness for health care reform. Oxford University Press, New York

    Google Scholar 

  7. Daniels N, Sabin J (2002) Setting limits fairly. Oxford University Press, New York

    Google Scholar 

  8. Donabedian A (2003) An Introduction to quality assurance in health care. Oxford University Press, Oxford

    Google Scholar 

  9. Fahy M, Roche J, Weiner A (2005) Beyond governance. Creating corporate value through performance, conformance and responsibility. John Wiley & Sons Ltd, Chichester

    Google Scholar 

  10. Gilardi F (2004) Institutional change in regulatory policies: Regulation through independent agencies and the three new institutionalisms. In Jordana J, Levi-Faur D (eds) The politics of regulation. Institutions and regulatory reforms for the age of governance. The crc series on competition, regulation and development. Edward Elgar Publishing Limited, Cheltenham

    Google Scholar 

  11. Guichard S (2004) The reform of the health care system in Portugal, economics department working papers No. 405, Organisation for Economic Co-operation and Development, October

  12. Kon J (2003) Understanding regulation and compliance. Securities Institute Services, London

    Google Scholar 

  13. Majone G (1994) The rise of the regulatory state in Europe. West Eur Politics 17(3):77–101

    Google Scholar 

  14. Majone G (1997) From the positive to the regulatory state. J Public Policy 17(2):139–167

    Article  Google Scholar 

  15. Mallin C (2004) Corporate governance. Oxford University Press, Oxford

    Google Scholar 

  16. McSherry R, Pearce P (2002) Clinical governance. A guide to implementation for healthcare professionals. Blackwell Science, London

    Google Scholar 

  17. Mullen P, Spurgeon P (2000) Priority setting and the public. Radcliffe Medical Press, Abingdon

    Google Scholar 

  18. NICE (2002) Principles for best practice in clinical audit, National Institute for Clinical Excellence. Radcliffe Medical Press, London

    Google Scholar 

  19. Saltman R, Figueras J (1997) European health care reform, analysis of current strategies, copenhagen: WHO regional publications. Eur Ser N 72

  20. Saltman R, Busse R (2002) Balancing regulation and entrepreneurialism in Europe’s health sector: Theory and practice. In: Richard B Saltman, Reinhard Busse, Elias Mossialos (eds) European observatory on health care systems regulating entrepreneurial behaviour in European health care systems. Open University Press, Buckingham

    Google Scholar 

  21. Selznick P (1985) Focusing organisational research on regulation. In: Noll R (ed) Regulatory policy and the social sciences. University of California Press, Berkeley

    Google Scholar 

  22. Sussex J (2001) The economics of the private finance initiative in the NHS. Office of Health Economics, London

    Google Scholar 

  23. Walshe K (2002) The rise of regulation in the NHS. Br Med J 324:967–970

    Article  Google Scholar 

  24. Walshe K (2003) Regulating healthcare. A prescription for improvement? State of Health Series. Open University Press, Maidenhead

    Google Scholar 

  25. Whincop M (2001) Bridging the entrepreneurial financial gap. Linking governance with regulatory policy. Ashgate Publishing Limited, Burlington

    Google Scholar 

Download references

Author information

Authors and Affiliations

Authors

Corresponding author

Correspondence to Rui Nunes.

Rights and permissions

Reprints and permissions

About this article

Cite this article

Nunes, R., Rego, G. & Brandão, C. The Rise of Independent Regulation in Health Care. Health Care Anal 15, 169–177 (2007). https://doi.org/10.1007/s10728-006-0040-6

Download citation

  • Received:

  • Accepted:

  • Published:

  • Issue Date:

  • DOI: https://doi.org/10.1007/s10728-006-0040-6

Keywords

Navigation