Markets within States: Privatization in Healthcare Services across Developed Countries

In the past two decades, healthcare systems have undergone tremendous changes under neoliberal political agendas. Although remarkable variation exists across countries, we can observe a general trend towards market competition in health services. This paper analyzes the process of privatization in healthcare across 21 OECD countries from 1970-2005.

The first section conceptualizes privatization in healthcare from a wider perspective. Privatization is often conceived as the selling of assets by the state to private owners, mainly describing policies of denationalization of state-owned industries, such as transportation, telecommunications or utilities (Savas 1987). However, another classification alludes to the distinction between delivery and responsibility with a definition of “the adoption of public functions by the private sector, whereas the responsibility for these functions remains with the public sector” (Janssen and Vandermade 1990). Given the complexity of healthcare systems, using latter definition would provide more through conceptual framework to analyze different forms of privatization (Table 1).

The second section examines the extend to which privatization occurred in the advanced capitalist countries using OECD Health Data 2007.  Changes in finance and delivery of healthcare measured by total healthcare expenditures from public sources, out of pocket payments, private insurance finance, and the percentage of private hospital beds are examined over 35 year period. 

The last section of the paper analyzes the politics of privatization in healthcare by examining the relationship between different forms of privatization and  the political ideology of the governments in power, measured as social democratic, liberal, Christian democratic and ex-fascist.