This article reviews the main modes of regulating health systems in Europe and industrialised countries. Regulation aims to reconcile four contradictory objectives: securing the best possible quality at reasonable expense, whilst ensuring fair distribution and encouraging innovation. Equity is frequently taken to be beyond consideration; only countries with a decreasing allocation of resources consider it a full-blown problem. But regulation is mainly interested in reconciling quality and overall cost; two approaches may be distinguished: the first treats producers as factors of production accompanied by the regulator whereas the second on the contrary treats providers as suppliers operating in a market and encourages them to behave in an optimal manner to provide effective care without spending too much. The market may either be stimulated by a central planner or genuinely established by letting – buyers – patients (who are not always best placed to do so) – select producers offering the best quality at the best price. Regulation via the market has to invent intermediary actors between final consumers and producers. The (contradictory) arguments justifying the different types of intervention of the regulator in terms of innovation are finally listed.
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