1In health affairs, the word “reform” is used so broadly and loosely as nearly to become emptied of meaning. All Western countries are forever “re-forming” their health care systems, or talking about doing so. For example, in 2003 an OECD report titled “Lessons from the Reform Experience” offered up a list (abridged here) that includes such particulars as: more coverage for the uninsured (United States), more levels of coverage for the insured, more cost sharing, better access to health services, more dissemination of information about the quality of care, more use of economic incentives to promote effectiveness, more attention to the satisfaction and choice patients enjoy, evidence-based medicine, diagnosis-related groups (DRGs), more use of ambulatory care, a more active role for purchasers vis-à-vis providers, more competition among providers, more competition among insurers, more technology assessment, more elaborate practice guidelines for prescribing drugs, tighter processes of approval for drugs that will be covered, and on and on (Docteur and Oxley, 2003). If reform is everything then perhaps it is nothing – anyway nothing distinguishable from health policy itself.

2The ubiquity of the term “reform” and the formidable length of the reform agenda tend to obscure a basic question immanent in all such reconfiguring: what goals is health policy reform supposed to achieve? The best response is old but still compelling: reforms aim to produce better access to higher quality care at costs that are affordable both for individuals and for society. The fundamental goals and challenges of health reform are, again, little distinguishable from the fundamental goals and challenges that are central to the health policy enterprise itself. The three desiderata are notoriously hard to reconcile, so the reform enterprise endlessly reprises the omnipresent trade-offs with which health policy is consigned to fiddle, and amid which it not infrequently burns.

■ Three types of reform

3The vacuity of generalization notwithstanding, three categories of reform cover most of the relevant territory.

4• The first is “system-improving” measures, meaning strategies such as the accumulation and analysis of data, electronic medical records, report cards, best practices, disease management, and so forth down a very long list, intended to make the system work better.

5• Second, “system transforming” policies such as explicit priority setting, managed competition (or in the unique American case, achievement of universal coverage) are what people tend to mean by “real” reform because they change the workings of the system not incrementally but “fundamentally”, though not of course completely.

6• The third category, “system-sustaining” reform, may sound oxymoronic (reforms are supposed to alter the status quo not preserve it), but, for reasons explored below, is perhaps the most important of the trio.

7The main, perhaps sole, virtue of this typology is to underscore the centrality of politics in health care reform. The point is not that a motley collection of irrational forces reflexively derided as “political” obstruct reform, but rather that reform suffers from a large and widening gap between policy analysis and policy practice. Health policy is increasingly an elaborate superstructure of bright ideas set atop rickety and fragile pillars of political comprehension, institutional capacity, and popular assent. Reform cannot make headway without attention to its political foundations, but political factors and forces are scarcely on the radar screen of European and North American health policy analysts and health services researchers, for whom politics seems to summon up the old song about the man who wasn’t there: “He wasn’t there again today. Oh how I wish he’d go away.”

8The argument may be illustrated by a brief look at two system-transforming reforms that have enjoyed more than fifteen years of fame: explicit priority setting and market forces.

■ Setting priorities

9Across Western nations one incessantly hears the same litany: The health system is too expensive; it is unaffordable and unsustainable; limits to it must be set; rationing must be swallowed; hard, indeed tragic choices must be made; and they ought to be made explicitly, as a matter of transparent social policy, not implicitly by payers and providers.

10Traditional criteria of coverage such as medical necessity and appropriateness are too porous and indulgent. Priorities must be embodied in lists and packages that define what is covered, what medical services are explicitly on or off, in or out. Cost-effectiveness tools can separate medical wheat from chaff. And policymakers might separate the proper preserve of collective, community responsibility from that in which individuals should pay for their own care.

11Although priority setting has prompted endless fascination and a vast literature, the striking fact of policy life is how little action has validated the bold talk. In European systems of national health insurance, lists and packages of basic benefits rarely transcend national formularies of prescription drugs.

12The archetype of the explicit priority list is the Oregon Health Plan (OHP). Troubled by moral dilemmas in deciding whom the Medicaid program’s (public) dollars should cover for what services, the state of Oregon in the early 1990s combined measures of public preference and analytic gauges of costs and benefits to devise a priority list of services. The legislature explicitly decides how much money it will commit to Medicaid in a given budget cycle, the money is allocated down the list, and services below the ensuing fiscal “line” are denied coverage. In the decade and a half since it began, the OHP has won wide international notice, but the realities of its “rationing” and “prioritization” have not been well understood. The OHP applied only to a subset of the state’s Medicaid population (poor mothers and children, not the aged and disabled). Public turnout at forums to debate its priorities was low, and an estimated 70 percent of attendees worked in the health or mental health field. Priority rankings reflected “subjective judgment” more than objective formulas. The plan largely dodged tragic choices, excluding from coverage only a small number of services of marginal medical value. Because it paid for all diagnostic visits and procedures, payment (hence coverage) for treatments could sometimes be bundled de facto into patient visits. Comorbidities gave providers flexibility in coding and billing. The savings from such rationing as occurred were tiny, an estimated 2 percent over the first five years of the plan. The expanded Medicaid coverage that accompanied the plan was funded not by savings from priority setting but rather from new revenues (increased taxes on cigarettes, 60 federal matching cents for each forty cents of new state Medicaid spending) and the implementation of managed care in Medicaid. Nor, despite its notoriety, has the plan been reproduced in any of the other 49 American states. In essence, OHP was a Trojan horse that legitimized and imported expanded coverage into policy under the cover of tough talk about choices, rationing, and savings (Jacobs and others, 1999; Leichter, 1997; Brown, 1991).

13The other renowned strategy for priority setting – demarcation of collective and individual responsibilities for health services – has made little more headway than explicit priority lists and baskets. In the early 1990s, the Netherlands held an extended and sophisticated debate on how such lines might be drawn, with results well summarized by Michael Harrison. The government’s plan to base priorities on criteria of “necessity, effectiveness, efficiency, and patients” responsibility for their own care in instances when costs are high and probable benefits low,’ was defeated by “provider opposition, broad entitlements to services, and political commitment to the principle of solidarity.” The government itself proposed putting “nearly all services into the statutory package – without assessing their necessity, efficiency, or effectiveness.” Efforts in the mid-1990s to modify benefits “very marginally” by ending coverage for adult dental care and certain physiotherapies met opposition that obliged the government to reverse its dental cuts (Harrison, 2004). In the United States, meanwhile, Medicare’s long struggle to introduce cost-effectiveness considerations into coverage decisions grinds on (Gillick, 2004).
On both sides of the Atlantic, priority setting, widely touted as a main event in the health policy circus, has proved to be largely a sideshow. Several considerations explain the underwhelming response that - at least so far - tends to greet formal and explicit priority setting among those who have to do it, not sell it (Gelijns and others, 2005).

■ Market forces

19Models that promise to transform health systems by means of improved incentives and unleashed competition have found much admiring attention in Europe and the USA. This “paradigm shift” averring that health care both can and should be treated as a “normal” market after all may indeed be the biggest conceptual health reform coup of the last 30 years. Economists were thrilled at the prospect of steering the policy ship toward an overdue reorganization (or perhaps, as Alan Maynard says, redisorganization). Policymakers, tired of fighting providers over price levels, welcomed market forces that might give them new leverage over both prices and (especially) volume, in which waste was supposedly abundant and poorly controlled.

20Market forces mean many different things, however.

21– “Managed care” (which the French are now said to be belatedly embracing) (Rodwin and LePen, 2004) is often adduced as the engine of marketbased transformation. But such managerial expedients as the “medecin traitant” (the primary care “gatekeeping” physician to whom French citizens are now instructed to go before seeing specialists) may not be enough.

22– Market discipline may require managed care organizations (MCOs) empowered to impose financial and administrative controls on providers. But unless MCOs compete vigorously they may lack incentives to enforce such controls.

23– Competition, however, can trigger such market malfunctions as misrepresentation to consumers, selection of preferred risks, and under service, so it must be carefully managed under public rules. The United States has steadfastly rejected the managerial part of managed competition. Nations such as the UK, the Netherlands, Germany, Sweden, and Israel, by contrast, have acknowledged both the need for public management if competition is not to corrode solidarity and equity, and the coveted efficiencies that market forces supposedly promote.
Whether the negative effects of such innovative strategies outweigh the positive is debatable, but on the whole the European “test” of managed competition has been disappointing. Three factors explain why these infusions of market forces into health systems have not come close to transforming them.

■ The new old thing

28The disappointed transformative promises of priority-setting and market forces leave the policy cupboard bare of bright ideas for reforming Western health systems, especially if cost control tops the agenda. The one “new” idea commanding respectful attention – make consumers pay a larger share of the cost of their health care – is of course an old one that could be politically explosive if pushed too hard. Western citizens expect their States to supply an adequate stock of health care services and to underwrite the costs of using them. (The USA is an obvious exception, but, given its enthusiasm for publicly funded medical innovations, itsreliance on public programs for roughly 130 million citizens, its tax policies that subsidize workplace coverage, and the prominence of public institutions in its extensive community safety nets, it is less exceptional than may be supposed.) Many European nations impose cost sharing, but it is seldom large-scale and the exceptions to it (pregnant women, the handicapped, war veterans, among others) are plentiful. No European society is rescinding its commitment to solidarity and universal coverage, and such innovations as health savings accounts, which accelerate the longterm American retreat from pooling risks and redistributing resources by means of health insurance, are unlikely to catch on there.

29Revisionist thinking about the causes and consequences of the health system’s many ills further aggravates the perplexity of policymakers at the growing analytical deficit of policy solutions. In the both Europe and the United States, the 1990s were marked by a gritty theoretical (anyway rhetorical) resolve to attack “all that waste” pervading health care systems. The apotheosis of this rationalizing quest in the United States was of course the Clinton plan of 1993 – 94, an elaborate systems analytic construct that would have installed universal coverage, reorganized the whole system, brought the rise of health care spending down to the level of increases in consumer prices, and saved enough to help reduce the federal budget deficit to boot. The spectacular collapse of the plan demonstrated that it is much easier successfully to spotlight “waste” than to squeeze it (Glied, 1997). (Likewise, issuing evidence-based guidelines and priority lists from on high is one thing; getting rank-and-file practitioners to follow the script in their daily work is quite another.) Obviously Western policymakers are not inclined to surrender the fight to contain health costs, but most appear to recognize that big and quick fixes are nowhere to be found.

30Meanwhile revisionist thinking about the causes and consequences of the health system’s many ills further aggravates the perplexity of policymakers at the growing paucity of plausible policy solutions. Influential analysts have unveiled a portrait of the political economy of health care with fresh highlights and accents. What mainly drives the health system and its costs is technology and technical innovation (Fuchs, 1986; Newhouse, 1993). Most of this technology, new and old, is “good stuff”, the benefits of which outweigh the costs (Glied, 1997; Cutler 2004). People want these expanding benefits, recognize that medical progress is the main source of rising medical costs (Fogel 2000), are willing to pay for these gains, and do not want to be told that they cannot have them. The key question is not what health care costs or how much it grows but rather whether its costs and growth leave the citizenry with resources adequate to buy enough of the other “good stuff” they want (Chernew and others, 2003). Modern Western nations, whether facing health costs that outstrip growth of GDP by 1.2 percent (the European average) or 2.5 percent (the American) (Reinhardt, 2005) can probably afford this steady medical progress, which entails trade-offs and opportunity costs the polity is willing to incur, for the foreseeable future. Commentators ought therefore to stop spotlighting rising shares of GDP devoted to health care as conclusive evidence that health care systems are mired in waste (Zweifel, 2005).
This conceptual repositioning leaves policymakers in a strategic quandary. Worrying less about health costs and enjoying heartily the benefits they buy may be comforting counsel prima facie, but no arena of public policy is so relentlessly driven as is health care – by the expectations of citizens, the demands of providers, the growing need for chronic care, the challenges of demography (including immigration), and, perhaps most importantly, the onward march of technological innovation, an incessant generator of new drugs, devices, and procedures of true clinical value. The cost horizon looks unbounded and uncontrollable. Health care creates jobs and economic growth, to be sure, but policy sectors that shoulder the opportunity costs health care imposes have their ardent political defenders, unwilling to concede that society can afford ever more health care at the expense of other desirable commodities. Meanwhile, policymakers often find the latter-day notion that the best way to constrain health costs is to make consumers pay more of them more scary than reassuring.
The policy picture on both sides of the Atlantic thus converges on: a continuing commitment in Europe to solidarity, equity, and universality (and in the USA an incremental shift from private to public coverage); rising costs; a dwindling menu of coping tools; myriad system-improving measures (information technology and such), which, their plentiful partisans notwithstanding, work mainly on the margins of the system; and a steady infusion of beneficial and costly medical innovations that political leaders and budget-makers feel unequal to the task of controlling. Policymakers, in short, are bothered and bewildered by the demands the system makes but less bewitched than heretofore by the correctives health policy analysts offer up.

■ Reforming as sustaining

31A quarter century ago Victor Fuchs succinctly captured the central policy challenge: “If we seek a health care system that does what people want it to do, we should not expect the most efficient outcome in terms of cost per life saved.” (Fuchs, 1979) Unable to live comfortably with or without this quaint vision, policymakers purse willy-nilly a system that “does what people want it to do,” mainly by raising revenues to feed it as it grows, that is, by embracing system-sustaining reforms. The French, for example, have addressed employers’ plaints about the economic strains of social insurance by shifting a sizable share of the funding of the health care system from contributions by employers and workers to a broader-based tax, the “generalized social contribution.” The Germans plan to raise the valueadded tax by 3 percent, partly to ease the burden of social insurance payments (including health care) on employers. The United States, whose leaders have enshrined tax cuts as nothing less than the first commandment in the contemporary political creed, funds innovations, such as prescription drug benefits for seniors (the Medicare Modernization Act carries an estimated ten-year price tag of roughly $725 billion), by inflating the federal budget deficit, though its creative uses of tobacco tax and settlement moneys for other health purposes, thus converging with European patterns.

32Wall Street Journal jeremiads notwithstanding, European policymakers take no pleasure in raising taxes, so they simultaneously seek political cover. First, they embellish and intensify the rhetoric of unsustainability in hopes that pressure on sickness funds, providers, and the public will reduce (however marginally) the new funds to be raised. Second, they reiterate the case for priority-setting, cost-effectiveness analysis, evidencebased medicine, technology assessment, and expert evaluation agencies, not because they expect these expedients to transform the system, but rather because they look good in press releases and white papers, and incremental efficiencies are better than none. Third, they seek politically acceptable ways to slow the budgetary hit of the “good stuff” steadily entering the system. The introduction and diffusion of new drugs, devices, or procedures may be delayed pending resolution of their official “experimental” status; or they may be covered subject to limits on the physicians or facilities that are permitted to deliver them or the clinical conditions for which they may be used; or they may be introduced on proviso that coverage end or decrease for superceded drugs, devices, or procedures.

33This strategic synthesis – augmented revenues, escalating rhetoric, technocratic tinkering, and punctuated entry and spread of new technologies – confuses everyone (including the policymakers who orchestrate it) but, under the circumstances, it is arguably the most (perhaps only) reasonable policy course. The reforms that matter most are system-sustaining ones that find and shift revenues; the other stratagems noted here are, in essence, political commentary on these fiscal improvisations. Analysts seeking to steer this cumbersome caravan should avoid mistaking sideshows (including medical evidence and economic incentives) for the main event, wherein plain old public finance – the venerable study of how nations elect to tax and spend – holds center stage across Western health systems.

34For better or worse, the major means by which policymakers contrive to give people the health systems they want is to find new funds to pump into them. Much of this system sustenance proceeds behind a veil of ignorance compounded of the technical complexity of the issues, deliberate political obscurantism, and relative indifference among health policy analysts to the state-centered machinations of public finance. Inscrutability can imperil legitimacy, however, so finding means to get the public back in the game may be vital to the long-term sustainability of system sustaining reforms. Therefore, another, embryonic system sustaining reform bears mention, especially on the European side – what the French call « la démocratie sanitaire » (health care democracy). This “movement”, which works to craft institutional innovations that permit people to say in some coherent detail what they want the health care system to be and do, reminds one and all that health systems are supposed to be humanitarian and democratic constructs, political expressions of the rights and claims of citizens (Revue francaise des Affaires sociales, 2000).

35This quest is arguably quixotic. What people want from their health systems is not mysterious – ready access to high quality care at low financial cost to themselves. Health policy exasperates precisely because people cannot enjoy these good things simultaneously and must either shrink from the trade-offs health care production functions impose; insist that all consumers but they and their loved ones face them; or console themselves that assaults on waste, fraud, abuse, and over-charging will dispel the need for hard choices. Innovations in “deliberative democracy”, much discussed among political theorists, might advance public awareness of the complexities, but much of the deliberative agenda is highly artificial and of questionable educative value. Perhaps Schumpeter’s version of democracy as competition among elites is the best one can do in this sphere – professional, analytical, political, and other elites competing to influence health policy while the befuddled masses sit and watch. The questions nag, however: Is intermittent dipping into the murky wellsprings of wisdom in superficial public opinion polls and episodic town meetings the best societies can do? Are there no better ways to institutionalize democratic participation in the making of health policy?

36No thousand points of light gleam in this arena, but a few merit passing mention.

37• The first entails advances in federalism. Since its ambitious health reform of 1978, for instance, Italy has struggled to balance national policy direction with decentralization and localism. After constant back-and-forth – regions complain that federal officials issue too many directives and too little money; the authorities in Rome grumble that the regions squander the funds they send them – the system is moving closer to the Canadian model, in which broad national principles define the terms on which national funds are shared with regions that enjoy wide discretion in their use (France and Taroni, 2005; France, 2001). Whether this latest Italian version of decentralization brings health policy closer to the people, and in what sense, deserves close study, as does the under-examined topic of federalism in health affairs more generally.

38• Second, nations may try to enhance participation in policymaking within central governments. A case in point is the composition of the Haut Conseil that authored the French health care reforms of August 2004. Convinced that the Juppé reforms of 1996 met with sharp resistance partly because they were designed and promulgated top-down by exclusive cadres of elite officials, those running the next round convened a 53-member council including, among myriad stake-holding sectors, three consumers. Questions about the legitimacy of different voices predictably surfaced: for example, labor members insisted that they should speak for consumers; victims of nosocomial infections declared that neither “consumers” nor “patients” could adequately comprehend or convey their unique fate; representation risked descending into an infinite regress. And, as ever, the “right” weighting of more and less intense preferences remained unresolved (indeed irresolvable). Still, the reform’s creators contend that the exercise has paid off handsomely in consensus building and – at least so far – in support for these reforms among general and special publics.

39• Participation and representation may also be enhanced in the course of applying broad policy to concrete cases. Great Britain’s NICE, for example, ponders how to define fair representation for the public, patients with specific clinical conditions, suppliers of medical goods, and more. Which such sectors should have a formal voice, who within each sector should have it, and at what decision stage (s) these voices should be heard are vexing questions that can be neither answered satisfactorily nor avoided.
• Consultative regional forums are a fourth mechanism that may enhance democratic deliberation in health policy debates. For instance, an article titled (in translation) “The Regions Reinvent Participatory Democracy”, in Le Monde of July 5, 2005, recounts a regional president’s rendition of the distinct advantage of participation at the regional level: “People don’ t show up to talk about dog droppings, but about employment, the environment, transportation, inequalities among areas ….” The challenges, added one participant, are “how to make those used to doing the talking listen? How to give people the means to be intelligent?” (Jérôme, 2005).
• Finally, regional and local institutions may be invented for, or adapted to, the demands of health care policy, as were features of the Juppé reforms of 1996 in France. When citizens with kidney disease in Franche-Comté grew indignant at the paucity of accessible freestanding dialysis clinics in their region, they and their regional and national associations astutely lobbied the new advisory committees and priority-setting bodies established by the 1996 reforms in each region to press the prefect, the local academic medical center, physicians of diverse specialties, and other stakeholders to create new dialysis capacity (Brechat and others, 2003; Brechat and Roger, 2003).
The question of course is whether these advances in democratic entry into policy venues that were heretofore less accessible enhance the standing not only of the intense preferences of interested groups but also of the more diffuse and general will of the larger public. Perhaps groups voicing intense preferences are foreordained to dominate an increasingly fragmented and conflicted “public” will. Or perhaps these democratic experiments will ease the institutional and political trade-offs by integrating proliferating functional (disease-specific and other “special interest” groups) more harmoniously into areal (regional and local) decision-making bodies.

■ Conclusions

40European gambits in health care democracy find few analogues in the market-minded USA, which purports to honor consumer sovereignty over political governance. This exception aside, however, the survey offered here of three health reform categories suggests a surprisingly high degree of transatlantic convergence. Strategies vary cross-nationally, to be sure, but they are nonetheless mainly variations on a common theme – how policies may respond to shared challenges that go with the territory of modern Western health care systems.

41Both Europe and the USA cheerfully adumbrate system-improving reforms that come highly hyped by their proponents, add arresting bullet points to laundry lists of reforms in presidential or prime ministerial speeches, and contribute marginally to the effectiveness and efficiency of systems that adopt them. Both loudly deplore the unsustainable status quo, give rhetorical obeisance to learned disquisitions on the inevitability of explicit priority setting and the virtues of market forces, muse on the many slips between the analysts’ glib lips and the policy cup, shrink from the political anguish required to set priorities and implement such theories as managed competition, gaze uneasily on the steady flow of “good stuff” traversing the medical pipeline, and seek politically acceptable means of making citizens pay more for their health care. Both cling to modest system improvements and the rousing rhetoric of system transformation as political cover for their principal policy task: raising new revenues to sustain health care systems that are not about to stop growing within national economies in which health care plays an ever more prominent and profitable part.