Health Care Reform in Britain and Germany: Recasting the Political Bargain with the Medical Profession

Health care systems in the postwar period have been governed by political bargains between the state and the medical profession that have delinzated their respective powers and jurisdictions. Recent health care cost containment reforms in Britain and Germany are altering these bargains, and thereby challenge the prerogatives and autonomy of the medical profession in health policy formulation and in administration of the health care systems. But these challenges to doctors\u27 power and autonomy vary between the two countries. Britain\u27s 1989 “internal market” reforms attack the corporatist bargain with physicians by introducing market mechanisms into the National Health Service and, at the same time, strengthening central state control of the health care system. In Germany, on the other hand, the government\u27s 1992 reforms only partially breached the corporatist bargain with doctors in order to strengthen rather than destroy this governance arrangement. The government has tried to curb what it views as excessive power of doctors while still allowing them a significant degree of corporatist self-governance. The reform efforts in both countries highlight some of the problems with different governance arrangements in health care systems and, more specifically, the difficulties associated with a market in health care

The third force? Independent regulatory agencies and elected politicians in Europe

Governments and legislatures in Europe have created or greatly strengthened independent regulatory agencies (IRAs). Yet they also retain many formal controls over those agencies. The article analyzes whether elected politicians have used their powers to create IRAs in their own image and kept IRAs under tight control or whether they have allowed IRAs to become a distinct set of actors, hence a "third force" in regulation. Principal–agent (PA) theories, largely based on U.S. experience, emphasize the importance of certain formal controls for elected politicians to limit "agency losses." However, an analysis of four European nations between 1990 and 2001 shows that elected politicians did not use their powers to appoint party politicians, force the early departures of IRA members, reverse IRA decisions, or reduce IRA budgets and powers. Using PA theory, two interpretations of this apparent puzzle are offered, each with differing implications for agency autonomy. One is that elected politicians used alternative methods of control, hence they suffered low "agency losses" and IRAs in practice had little autonomy. The other is that elected politicians found that the benefits of IRA autonomy in practice and the costs of applying their formal control outweighed agency losses, and hence accepted agency autonomy