The provision of healthcare services operates within a complex and changing institutional structure where the provision and management of healthcare systems is increasingly driven by political agendas that stress the need for reform and modernisation. The whether and how national healthcare systems need to be reformed and the outcomes of healthcare reorganisation are important challenges for national governments.

We can describe healthcare systems and their underlying funding structures as running along a spectrum where at one end the state assumes collecting funding responsibility for healthcare and at the other end the household underwrites, through private insurance, the risk and uncertainty associated with morbidity and ageing. However, all of the developed economies share a number of common underlying financial pressures on their healthcare systems and these are forcing governments to re-think how they fund and reform their healthcare systems. In the US healthcare spending continues to rise as a proportion of gross domestic product (GDP).

Since 1970, health care spending has grown at an average annual rate of 9.9%, or about 2.5 percentage points faster than GDP. In recent decades, the growth rates for health spending and GDP have slowed, but health spending growth remains consistently above GDP growth. As a share of the economy, health care has risen from 7.2% of GDP in 1965 to over 16% of GDP today, and it is projected to be 20% of GDP just 10 years from now. (KFFHRE, 2004 Kaiser Family Foundation Health Research and Educational Trust. (2004). Employer Health Benefits: 2004 Summary of Findings. Menlo Park, California.

Over the period 1960–2003 healthcare expenditure, as a share of GDP, has continued to increase: in Germany up from 6 to 11%, France 4 to 10.5%, Japan 3 to 7.5% and the UK 4 to 8%. This increase in healthcare expenditure comes at the end of a period when the share of the population (see Newhouse, 1992 and Alternstetter and Busse, 2001) over the age of 65 will continue to increase and life expectancy is still on an upward trajectory. This combined with the fact that patient healthcare is now managed with increasingly expensive technologies and access to the latest, and more costly, drug therapies. It is against this background that government(s) are struggling to legislate and reform organisation and institutional structures that surround the provision of their healthcare services.

The first three papers in this special issue have been chosen because they represent different perspectives on, what is, and what is not inscribed into national debates surrounding healthcare reform. Arnold and Reeves observe that health reforms cannot simply be conditioned by the demands of national policy frameworks and domestic political requirements. They argue that international trade agreements impose significant constraints on national governments and what healthcare reform can achieve. Healthcare policy on schizophrenia is the subject of Smark’s paper on social accounting where accounting numbers play an important role in bifurcating what is inscribed and what is not inscribed into the policy making process. Whilst the indirect costs of managing schizophrenia outweigh the direct budgetary costs by 2:1 they play little or no part in policy formulation because they are invisible and have little influence with the institutions that formulate policy. In England the objective is to reform healthcare provision and establish a patient-led NHS. Dent and Haslam argue that a number of demand and supply-side issues have not been incorporated into the policy making process and have the potential to frustrate outcomes.

The second group of papers represent healthcare reform in action and provide accounts which describe the rather less than straightforward connection between the objects of reform and outcomes. In Scotland, New Labour’s healthcare reforms introduced Local Health Care Co-operatives (LHCCs) where the objective was to establish partnership relations between resource managers and doctors running general practice surgery. Hannnah, accounts for these reforms revealing how the lack of trust between doctors and managers progressively undermined the reform of healthcare systems based on a “partnership network”. In Britain New Labour’s plan for the NHS involved providing substantial additional funding for reform which would transform hospital capacity to treat patients in the four nations. Haslam and Marriott argue that the results of funding for reform in the four-nation’s hospital sector have been disappointing. Additional funding has not delivered stable hospital finances when one-third of hospital trusts are currently in deficit and physical transformation, is fragile and disappointing.

1. Debating healthcare reform and increasing the field of the visible

Arnold and Reeves observe that debates on healthcare reform should not be treated as if healthcare is just “a matter of domestic public policy”. Their argument is that this is increasingly untenable when multilateral and bilateral trade agreements governing health services have the potential to pre-empt national debates on healthcare reform. They illustrate these tensions in three country cases: the United States, Canada and Australia.

The US case reveals the difficulty connected with the possibility of installing healthcare reforms that address the needs of 45 million Americans who do not have access to cheap affordable healthcare. Arnold and Reeves explain how multilateral trade agreements especially the World Trade Organization’s (WTO), General Agreement on Trade in Services (GATS) would frustrate and limit the United States’ ability to install plans for a comprehensive provision of public health insurance. Under the GATS creating a monopoly service could be subject to legal challenge where there is already market access and coverage.

In Canada the North American Free Trade Agreement (NAFTA) contains a reservation (in annex II) which was designed to maintain the provision of a public monopoly in the provision of health insurance and core hospital services. However, these provisions also operate to limit future reforms, for example, were the Canadian government to increase market competition through: competitive tendering, public private partnerships or private finance initiatives and for profit healthcare. This would open the door for private sector investors where, according to Arnold and Reeves “the threat of trade challenges to state regulations or new health policy initiatives multiplies”.