Designing Publicly Funded Healthcare Markets

This paper argues that there is a need for competition agencies to become more active and effective advocates for the use of choice and competition in publicly funded healthcare markets. It suggests that the need for strong regulation will not shrink or disappear, as it might do in a utility, and so advocacy should not focus simply on deregulating, but instead on designing smarter regulations that create markets that incentivise competition on aspects of the service that patients and payers care about most. Drawing on the literature and different examples of pro-competitive reforms that have been undertaken in different countries, it identifies 10 key policy decisions that make a difference when introducing or reforming competitive forces in healthcare markets.It was prepared as a background note for a discussion on the Design of Publicly Funded Healthcare Markets held at the OECD in November 2018.