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Building a national Health System: Learning From Other Countries' Mistakes


  • Brian Ferguson

    (Department of Economics, University of Guelph, Ontario, Canada and Health Policy Fellow, Atlantic Institute for Market Studies, Canada)


Any country designing a national health system today has the advantage that virtually every structure which it might be considering has been tried, to some degree or another, by some other country. Looking at evidence from those experiments yields a number of broad conclusions. Most importantly, standard economic analysis applies in health care, as in other areas, in the sense that demand curves slope down and supply curves slope up. Theories which argue that economic theory does not apply to health care- the argument that doctors induce unnecessary demand for their hold up. In terms of broad policy conclusions, the international empirical evidence suggests that shifting doctors from free-for-service to capitation reduces their productivity and that preventive care, while good for patients, cannot be counted on to reduce costs. While suppliers of health care do respond to incentives in the same general manner as do suppliers of any other products, the private sector should not be seen as the enemy of a national health system. Private insurance and private supply can function as part of an efficient, universal national health care system.

Suggested Citation

  • Brian Ferguson, 2008. "Building a national Health System: Learning From Other Countries' Mistakes," Ekonomia, Cyprus Economic Society and University of Cyprus, vol. 11(1), pages 1-18, Summer.
  • Handle: RePEc:ekn:ekonom:v:11:y:2008:i:1:p:1-18

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    References listed on IDEAS

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    More about this item

    JEL classification:

    • I11 - Health, Education, and Welfare - - Health - - - Analysis of Health Care Markets
    • I18 - Health, Education, and Welfare - - Health - - - Government Policy; Regulation; Public Health
    • H11 - Public Economics - - Structure and Scope of Government - - - Structure and Scope of Government
    • H44 - Public Economics - - Publicly Provided Goods - - - Publicly Provided Goods: Mixed Markets


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