REGULATION
Regulation is the 4th control knob for
people who want to improve system performance. It is the use of coercive power
of the state to shape the behaviour of individuals and organizations in the
health sector. Economists use market as a way of allocating resources. In the
competitive market, to increase one person’s utility is by decreasing another
person’s own.
The government that wants to use the
market system 1st uses regulation to ensure honest and open exchange
to avoid the most powerful taking all. Secondly regulation is used to ensure a
more equitable outcome. Thirdly, Government use regulation to improve on the
markets that do not function well on their own. Fourthly government uses
regulation to advance moral norms that markets can not be relied upon.
It can be seen that regulation is a
major control knob in the health sector. It is used by those who want to
improve on their system performance e.g using rules to protect consumers
against poor quality drugs and incompetent doctors can improve health status
and satisfaction. Regulation frequently relates with other control knobs in the
health sector; for the other control knobs to be effective, they must be
accompanied by appropriate regulation.
What is regulation and why regulation?
1st
Regulation is the Government’s use of its excessive power to impose constraints
on individuals and organizations. It includes the legal instruments (laws, decrees,
orders, codes, guidelines. Administrative rules) whether issued by the
government or by non governmental bodies to which the government has delegated
regulatory power. The rules and requirements imposed on purchasers of health
insurance is not regulation but rather contracts.
Regulations is used by the
government in the health sector to establish the obligations and
responsibilities of both buyers (patients, consumers) and sellers (doctors,
nurses, pharmacists, hospitals, insurers) to ensure that agreed upon
transactions are honest, transparent and reliably executed.
Secondly
Regulation is used to promote more equal access to
health care and improve the distribution of health status. E.g poor people get
fewer services on hospitals organized on market principles, and also few
doctors are posted in depressed rural areas with depressed economic
opportunities.
Thirdly
Regulation arises because health
sector markets often do not possess the requisite conditions for reasonable
effective competition and as such consumers may not be able to judge the
quality of the goods or services they consume. In view of these, they may be
victimized by unqualified doctors or prone use substandard drugs.
Finally
Regulation is used to promote some
philosophical behaviour. Some individual behaviours are regulated to improve
health out comes e.g quarantining recalcitrant HIV-infected individuals who
engage in unsafe sex.
How does regulation influence the
performance of the health system?
Regulations that have an impact on a
population health or provide financial risk-protection can directory affect the
performance goal e.g ensuring the safety and purity of water, food and drugs
will influence the over all health status.
- Compulsory
enrollment in social insurance plans can ensure that all eligible persons have
financial risk-protection.
- Regulations
aimed at improving the quality of health services can lead to improved health
outcomes and increased public satisfaction.
- Regulation
aimed at correcting market failure will improve efficiency, lower health costs,
make health services affordable, increase service use and in turn improve heath
status.
- Regulating
monopolistic pricing will lower the prices of health services this will lead to
availability of health services, positive health outcome and patient
satisfaction.
3. What
are the major determinants of regulatory success?
Effective regulation demands the combination of
technical expertise, administrative capacity and political support that is not
always easy for nations to provide. Experience show that successful regulatory
efforts depend on three key aspects of each nation’s situation: cultural
attitude, government competence and political support.
Cultural attitude
There are two types of cultural
attitude general and specific. General involves the views the citizens have
towards government and their overall pattern of reaction to state actions.
These attitude vary around the
world; some countries have law-abiding citizens who see government regulations
trustworthy, fair and are needy to abide by it e.g Denmark and Singapore. In
contrast some other cultures look for ways to avoid rather than comply with
regulations. In the same vein, some governments impose harsh penalties while
some impose less on violators of government regulations.
Regulators and regulatees react
differently depending on whether they agree with the goal expressed by the
regulation. When legal restrictions are more compatible with social beliefs
citizens are more likely to comply; otherwise the regulated may try to evade
the regulation.
Government competence
The success a country has in
carrying out regulation depends in part on the organizational capacity of its
government. A country with a high quality civil service, well-functioning
police and court systems, effective tax- reporting etc, the task of
establishing a working regulatory agency is much easier. Many low and middle
income countries lack the technical expertise, administrative capacity and
information system to promulgate regulations. They have few regulations that
are focused on dramatic situations where bad behaviour can directory impair
public safety. Here enforcement of regulation are marred by corruption and
favoritism. Private health care and private insurance markets have less regulation
in such countries. High income countries are in better way to enforce workable
regulations.
Political support
All regulations, whether legislated
or decreed by executive order are enacted through political process. In
designing regulations, political skills are of great importance. All nations
have organized interest groups no matter the type of government. These interest
groups are very powerful in influencing decisions. Political support is
required both for instituting a regulatory process and for ensuring its
effective implementation.
Major types of regulation in the health
sector
There are two major types of
regulation in the health sector-regulation of the Health care sector and
Regulation of the health insurance system.
Regulation of the health care sector
Equity
– Nations use regulation to ensure equitable access to health care e.g some
countries make it mandatory that fresh graduates of medical and nursing schools
must serve for a period of time in undeserved areas.
- correct
market failure
When
there is market failure, the government uses regulation to protect
consumers/patients against substandard medical services.
- Help
consumers make informed choice
Buyers/consumers most of the time do
not know the content of what they are buying. Regulation protects buyers against
substandard products, and from poor quality service.
- Drug
approval
Government use regulation to make
drug manufacturers demonstrate drugs efficacy and safety before it enters the
circulation. They also mandate them provide possible adverse reactions,
contraindication, and interaction with other drugs.
Licensing/Accreditation
These are used to ensure quality
health care especially in low and middle income countries. Graduates of
medical, nursing and other allied health courses most show evidence of
satisfactory completion of required course and good in character before they
are licensed. Accreditation ensures that proper equipments and structure are
put in a place.
Licensing and accreditation assure a
basic level of quality focused in inputs raging from education to capital
investments.
Regulation on manpower
Government put regulation on
manpower by having control for example on the number of candidates to be
admitted into the medical school and other allied health courses.
- Regulation
of capital investment
This is a process of evaluating new
technologies and avoids obsolete equipments.
- Monopoly
Both
private and public monopolies exploit patient, private for gains and public for
ways that will interest private practitioners
How can regulations be used effectively
- Incentives
Combining
regulation with incentives will make rules Moro flexible and increase voluntary
compliance.
- Less
corruption
If there less corruption,
functioning bureaucracy, effective police system, regulation would be better
accepted.
Equity
Reformers
should bear both the rich and poor in mind. The poor uneducated and socially
marginalized are usually the most exploited in the market system. To benefit
the poor, reformers should at least regulate the retail price of drugs and
ensure the provision of safe drugs.
Summary
In
summary, regulation as a control knob in the health sector can be an effective
measure to improve performance especially when combined with incentives,
behaviour and suitable organizational change.