ABSTRACT
Health services follow the logic of production and that of services, but have to deal with specific issues. Demand comes in various types; some is urgent and some can wait. Health services have two products, to enable health and to provide help. There are four types of production functions: the natural history of disease, the placebo effect, theory-backed therapies, and behavioral changes. From this follows the difference between output (what is done to a patient) and outcome (what happens to a patient’s medical condition). The measurement and evaluation of these stand in the way of value-based healthcare.
In healthcare, the equivalent of setup is diagnosis and care plan. Patients are flow units on clinical pathways. Health service processes are conceptualized as outcome streams, continuous flows defined by clinical indicators, functioning, and experience, and punctuated by service events. Between steps, patients are akin to inventory that has to be managed.
Health services are based on healing relationships that are also commercial and involve a degree of information asymmetry. The nature of health and illness stipulates the necessity of third-party finance that complicates ordinary market mechanisms.
Health service distribution has to deal with the trilemma of time–location access, the variety of services at one location, and the level of specialization.
