ABSTRACT
Introduction The perception of policy makers in most healthcare systems, public or private, is that the power rests on the provider side and that is where regulators need to act with respect to directing incentives. This would seem to rule out placing much reliance on the individual consumer, from the demand side of the market, as a driver of efficiency in resource allocation. However, there may still be a role for collective purchasing in some form, resulting in powerful provider units, such as hospitals, being faced with purchasing entities which can negotiate more effect ively on behalf of groups of individuals.1 These entities could be organised: • on a population basis, as in many (usually taxation-based) publicly funded
healthcare systems • through consumers registering with an intermediary who receives a payment
from the individual plus a subsidised payment from government to reflect the individual's risk status, as in other (usually social insurance) systems
• through consumers (or, more likely, their employers) paying the premium in full to register with an entity, such as a health maintenance organisation (HMO), as in private systems.21
