Convergence versus social embeddedness

EUROPEAN JOURNAL OF PUBLIC HEALTH 1997; 7: 449-453

Convergence versus social embeddedness Debating the future direction of health care systems RICHARD B. SALTMAN *

The question of whether health care systems in developed countries are coming to resemble each other more is attracting increasing attention. A number of recent papers have argued that the current crop of health reforms is creating convergence in health systems structure and organization. This paper suggests a 3-part framework with which to analyse competing claims about convergence versus what can be termed social embeddedness (as reflected in divergence between different health systems). The available evidence on social, political/health policy and technical/mechanical categories is reviewed. The paper concludes that both convergence and divergence can be seen in subsectors of developed countries' health systems. It might be useful to consider the convergence/divergence mix between countries in order to reflect better the current situation as well as to retain a broader range of options for national policy makers.

Key words: competition, convergence, health systems, planned markets, social embeddedness

he comparative study of the health systems of developed countries has grown considerably over the last decade. The number of book-length, macro-level system studies1"14 as well as micro-level and single-issue analyses15"21 has increased dramatically. Much of this increase has been driven by the broad process of health reform now visible in many developed countries. As governments have developed reform programmes, policy makers have sought to learn more about both the positive and negative experiences in other countries. In an effort to influence policy makers, reform proponents and opponents have sought to justify their positions by drawing on the international evidence currently available. As the number of reform initiatives has grown, researchers have sought to analyse the central themes that underlie and condition this cross-national reform process. One of the more contentious points in the literature surrounding health reforms concerns the issue of convergence. The proponents of convergence interpret current trends within the structure and policies of health systems in developed countries as demonstrating the degree to which these health systems are coming to resemble each other. Conversely, those who do not perceive convergence emphasize the extent to which national health policies and structures reflect deeply rooted values and norms which differ between societies and thus lead not to convergence but rather to divergence in current reform policy and activities. This second perspective, reflecting as it does the diverse character of different societies and of the social interactions that occur with them, can be termed social embeddedness. Defined in this fashion, the

* Correspondence: Professor Richard B. Saltman, PhD, Department of Health Policy and Management, The Rollins School of Public Health of Emory University, 1518 Clifton Road, N.E, Atlanta, GA 30322, USA, tel. +1 404 7278743, fax +1 404 7279198

current debate can be framed as a disagreement as to whether convergence or social embeddedness best organizes the existing experience in health reforms. The theoretical argument in favour of convergence has been made by Field7 in the introduction to his edited book on health care in various countries and has subsequently been further developed in a new paper. Field' contended that broadly international forces of science and technology (and capitalist economics, one could add) are remaking industrial societies such that they increasingly resemble one another both in form and character. Following from this general analysis, convergence among health systems can be viewed as simply an illustration within one specific sector of society of this more fundamental development. The convergence of health sector strategies and behaviours should thus be understood as expected and normal. In this internationalist view, medical procedures can also be expected to become increasingly similar in different countries: Field7 noted that penicillin has the same clinical properties and consequences in every country in which it is prescribed. In a parallel, practice-based process, a number of health policy commentators, particularly health economists, have sought to develop evidence in support of the convergence thesis. Hurst identified convergence among 7 European countries on what he termed the 'public contract' model. Abel-Smith23 found convergence in 6 European-wide policy tends, including 'monitoring what doctors are authorizing' and 'limited drug lists'. Chernichovsky24 compressed together both funding and resource allocation mechanisms, of both public and private ownership and accountability, and then contended that these different elements converge in all developed and many developing countries on what he called 'the principles of public finance', in combination with what he termed an OMCC - the 'organization and manage-

Downloaded from eurpub.oxfordjournals.org by guest on July 21, 2011

T

EUROPEAN JOURNAL OF PUBLIC HEALTH VOL. 7 1997 NO. 4

THREE CATEGORIES OF ANALYSIS The diverse and sometimes diffuse activities put forward as examples by proponents of convergence theory, as well as the differing analytic frameworks of those who contend that convergence cannot be demonstrated, suggests that those various analysts may be talking about different parts of a health care system. In an analogy from the classic story about the blind men and the elephant, they may well be assessing different elements of what in reality remains an integrated financing and service delivery system. A more productive way to organize current evidence about health system behaviour may be to split the multitude of topics involved into 3 separate categories, which correspond to 3 different levels of centrality to a society or a country. First, social categories, which are the most central level. These embody long-termed fixed characteristics of a society. Here one includes the core philosophy and culture of a country as reflected in its history and its dominant values and norms. These social categories find specific expression in what sociologists refer to as the 'social relations' of a society. Second, political categories, particularly those that reflect national political goals and objectives. While these categories inevitably reflect key aspects of the society's dominant norms and values, the political objectives they express tend to be less permanent and can be subject to near-term change. These political categories include a range of topics, beginning with the political institutions that are used to organize the country's government - a theme developed by Immergut. 8 However, these political 9 categories also include the structure of national health

policy and thus incorporate, among other points, the following. • The degree of emphasis on health, health status and health gain as against the more traditional formulation of medical and clinical health care services. • The degree of solidarity, equity and equality in the design of health finance and in access to health providers. • The broad balance between governmental planning and regulatory approaches as against market-oriented competitive and incentive-based institutions. • The degree to which specific sectors of the health system will have priority funding, for example whether primary and preventive care will have priority over hospitalbased services. • The public/private mix of financing and provider institutions. • The degree of quality with which specific services will be produced and delivered to patients. The third and final level is that of the technical/mechanical categories, which incorporates, among other quite disparate elements, the following. • Scientific medicine, including clinical procedures and Pharmaceuticals. • Institutional management, for example the current trend to 're-engineer' organizations by eliminating levels of middle management and, not coincidentally, large numbers of employees. • Provider payment mechanisms. In this last category, one finds both market-oriented and regulatory elements of resource allocation, including copayments and deductibles, global budgets, GP capitation and gate keeping, patient-led provider payment, public contracts, 3 O M C C 2 4 and cooperative long-term or soft contracts. 30 The evidence currently available suggests the following with regard to convergence. First, concerning social embeddedness categories, there has been some small movement towards convergence among industrialized countries. This reflects in part the growing prominence in the electronic media of manufactured culture from the US, as well as the effects of increasing international travel and of economic integration in Europe and North America. Overall, however, values and norms in most developed societies remain quite stable and, in many cases, notably distinct. Swedes still treasure security and equity, Germans emphasize order, while Americans still prefer aggressive individualism. With regard to health care, most Europeans still value health care as a social good that should be made collectively available, while in the US the preference for markets has generated a for-profit managed care revolution that has transformed health care into a commercial commodity, bought and sold on the open market. 31 Concerning social embeddedness categories, then, there would still appear to be substantial divergence, both between different European countries and between Europe generally and the US. Moving to the second grouping, political/health policy categories, the evidence with regard to convergence is


ment of care consumption'. Taking a similar position, Wilsford,25 a political scientist, contended that, in health systems across all developed countries including the US and Japan, "philosophy is convergent, but organizational principles and instruments are divergent" (p. 578). White 9 argued that all industrialized countries except the US are converging upon mandatory public health insurance. Although these analysts all embrace convergence theory, they appear to be describing related but distinct phenomena. Each contends that convergence can be found in one or more of a variety of different components within each industrial country's health system. One can observe a similar disparity of perspectives among commentators who perceive divergence rather than convergence among industrialized countries' health systems. This group of analysts tend to split along 2 different theoretical lines. One group, following the conceptual lead of sociologists like Granovetter, view national health policy — like public policy generally - to be a concrete political expression of underlying social norms and values. 27 A second subgroup, reflecting a Marxist perspective, contend that arguments favouring what they label 'automatic convergence' are reductionist since these arguments strip out the central elements of power and class conflict from the national policy making process 17,28,29

Convergence versus social embeddedness

icies that promote the production offish and poultry over pork.3 Conversely, countries which are predominantly financed through statutory sick funds, such as Germany and Austria, have a relatively weak national influence over health policy making and, in partial consequence, typically tend to emphasize medical care more than health gain. Every European country, however, is more willing to tie broader health-related matters explicitly to official public policy than is the USA. Despite various federal, state and local policies that ban smoking in public buildings, the US Government still provides tobacco farmers with subsidies worth billions of dollars and regularly refuses to ban cigarette advertising or to raise the low excise tax on the price of cigarettes. In 1995, the USA took a number of legislative steps backward in terms of key health-related policies. It eliminated the national speed limit on its highways and it repealed requirements that motorcyclists wear helmets. Both measures are expected by public health experts to increase the death rate from road accidents substantially. Most egregiously, rather than severely limiting access to handguns - a reasonable public health response in the US 37 - a number of the 50 states passed legislation that extends the right of individual use of firearms to the carrying of concealed weapons. ° Overall, the available evidence concerning political/ health policy categories is decidedly mixed. Depending on the issue involved, one can find examples of convergence, of formal convergence but practical divergence and of consistent divergence. The appropriate conclusion appears to be that, in this second category of analysis, there is some convergence among countries, but there also are noticeable points of divergence as well. Finally, at the third level of analysis are the technical/ mechanical categories. Here, in practice, there does appear to be substantial convergence. Certainly, there is substantial convergence on many scientific medical matters, although not necessarily on the manner, frequency and financial cost with which these procedures will be applied to particular patients. There is also substantial convergence on the appropriateness of using most pharmaceuticals, notwithstanding evidence on varying cultural patterns of medical practice. There is considerably less convergence regarding organizational management within health systems, although the language, if not the full brunt of re-engineering, has now spread from the USA to some parts of Europe. With regard to specific economic instruments, particular mechanisms, such as capitation-based payment for GPs, are becoming more common across the developed world.2-35 Capitation-based GP payments are currently under consideration in a number of Canadian provinces and have been proposed by the 2 largest sick fund associations in Germany. Other technical mechanisms, for instance Hurst's3 public contracts, are more common than they were 10 years ago, but are far from universal. Moreover, these contracts often have a distinctly d ifferent content in the various health systems that have adopted them. They range from block contracts through various


more mixed. On some elements, there would appear to be convergence of both policy and practice in many if not most developed countries. One can point, for example, to the shared concern among national policy makers about value for money, e.g. obtaining greater efficiency in how health services are produced. In other elements, there appears to be convergence in officially stated policy but considerable divergence in the willingness to actually implement that policy. In the early 1980s, for example, all member states of the European Region of the World Health Organization adopted a Health for All strategy, committing them to prioritize primary and preventive care.32 In practice, however, countries have pursued rather diverse strategies for their health systems. Finland, at one end of the continuum, reallocated considerable resources to finance the expansion of primary and preventive care. At the other end of the continuum, some sick fund countries such as Germany have still not developed a framework to provide adequate funding for preventive and public health activities. Another category where there appears to be convergence in stated policies but visible divergence in the degree of implementation is in the broad balance between governmental planning and regulatory approaches as against market-style competitive and incentive-based policies. In the mid-1990s, more governments seem to perceive an advantage in pronouncing themselves favourably disposed toward market-style competitive mechanisms in principle than are actually serious about introducing them in practice. This reflects not only the traditional reluctance, as public choice economists would have it, of government bureaucrats to surrender power,33'34 but, more realistically, an awareness on the part of senior decision makers of the importance of governmental regulation in the smooth provision of a complicated social good such as health care. Lastly, there are elements within these political/health policy categories where one can observe clear and distinct divergence, both between European nations and between Europe and the USA. There is, for example, a manifest dichotomy regarding the subsectors within a health system in which competitive incentives should be applied. The USA relies heavily upon market mechanisms on die funding side of its system, The Netherlands adopted but subsequently changed its mind about introducing market forces on the funding side and Germany is formally committed to introducing a limited degree of competition between its sick funds in 1996. Most other European and OECD countries, however, use competitive incentives exclusively on the production side and in the allocation mechanisms that channel available funds to service providers.35 A further category which demonstrates divergence is the distinction between systems focused on health and health gain as against systems focused predominantly on the provision of traditional medical care. Several European countries, for example Finland, have pursued a variety of national policies that emphasize health gain rather than solely medical care, including healthy agricultural pol-

EUROPEAN JOURNAL OF PUBLIC HEALTH VOL. 7 1997 NO. 4

DRAWING CONCLUSIONS What does the available evidence indicate as to whether convergence or social embeddedness best describes the current pattern among health systems in industrialized countries? Does it support Field's' theory of convergence or, conversely, does recent experience lend credibility to the social embeddedness thesis? Summarized, the evidence 9 suggests the following.

• Continued divergence in social embeddedness categories. • Considerable divergence but some convergence, at least in official rhetoric, in political/health policy categories. • Considerable convergence but some divergence in technical/mechanical categories. The results from this 3-part analysis shed light on the complicated interrelationships that presently exist between and among the health systems in the developed world. The structural and developmental levels within different health systems do not neatly reflect either convergence, with its assumptions about harmonization and/or homogenization, or social embeddedness, with its emphasis upon normative distinctions and/or political process. Rather, the evidence points towards a complex interplay of partners between and within countries, dependent upon economic, cultural, historical and geographical, as well as political, elements. As a consequence, the relationship between certain aspects of 2 countries' health systems may at a given point in time appear convergent, while the pattern between other segments of the same systems may be substantially divergent. At the level of political/health policy categories and, decidedly, at the level of technical/mechanical mechanisms, these relationships and patterns could well shift with the ebb and flow of academic debate and political priorities. To return to the analogy of the blind men and the elephant, it may be that the proponents of both convergence and of social embeddedness are equally correct. There is evidence to support both sides of the debate. If this is true, then the appropriate theoretical question for comparative health systems analysis becomes something of the order of 'what is the relative balance between convergence and social embeddedness in this particular group of countries, at this particular moment in time?' With a discussion framed in this fashion, it becomes easier for national policy makers to identify alternative strategies and to consider adopting different policy options. In particular, comparative systems studies can help move policy makers beyond the now-fashionable assumption that all policy initiatives must reflect the cost containment imperatives presumed to be required by a globalizing world economy. The notion of a convergence/divergence mix may upset some ideological apple-carts, in particular those of the more neoclassically minded health economists who believe that the health policy landscape is flattening into just another set of clearing prices between demand and supply. In the long run, however, this more nuanced analytic tool may aid national policy makers in charting their own progress through the complexities of health reform and may help strengthen national resolve when there continue to be appropriate differences in health system mechanisms, policies and values. An earlier version of this paper was presented at the International Conference on Government and Health Care, Jerusalem, Israel, on 17-21 December 1995.


types of soft/high-trust contracts to hard/adversarial, litigable arrangements. Finally, there are some technical mechanisms which are controversial among both national policy makers and academics alike. Co-payments, for example, are prohibited throughout Canada, 41 but, under the heading 'ticket moderateur', they are deeply ingrained in social insurance structure in France. 42 Sweden utilizes co-payments but has a nationally set limit for total out of pocket costs, providing income protection to the chronically ill.4-' Many countries require co-payments for pharmaceuticals, however, exclusions for children, elderly and the chronically ill can eliminate co-payments for the majority of prescriptions. 4 Finland adopted small annual co-payments in its public health centres for the first time in 1993, but only after the financial fallout from the worst recession since the 1930s led policy makers to ignore vociferous protests from public health professionals and academics. This divergence in policy approaches reflects a continuing theoretical debate among academics about the positive and negative aspects of co-payments. 4 Another examples of a mechanism disputed among academics and policy makers - in this case within the USA - is the individual medical savings account, an idea borrowed from Singapore. 44 The central concept is that employer-paid health insurance premiums would be placed in an individual account for each worker, who would purchase a low-premium insurance policy for catastrophic care and who could keep any funds left in the account for personal use after paying for regular (e.g. non-catastrophic) medical service. The idea is that if individuals must pay personally for regular medical care from their own funds, they will use fewer services and bargain with providers over price. This concept has been promoted by some economists as a device to privatize financial risk from illness and thus to reduce overall demand for medical care. 45 There are fears, however, that the scheme will undermine the risk-sharing character of health insurance as well as promote a return to unmonitored fee for service medicine. Some economists have also attacked the scheme as economically inefficient, arguing that it did not actually generate savings in Singapore. 4 " On issues such as co-payments and medical savings accounts, then, there is strong divergence among both national policy makers and academics. One can conclude that, in the technical/mechanical categories, current experience demonstrates considerable convergence. As the discussion above suggests, however, there are also substantial pockets of national divergence in both policy and doctrine.

Convergence versus social embeddedness Thanks are due Robert Evans, Wynand van der Ven, Mordecai Sham and this journal's reviewers for their comments and suggestions. Any errors of fact or interpretation remain solely the responsibility of the author.

Received 13 February 1996, accepted 8 July 1996


1 OECD. The reform of health care: a comparative analysis of seven OECD countries. Paris: OECD, 1992. 2 OECD. The reform of health care systems: a review of seventeen OECD countries. Paris: OECD, 1994. 3 Hurst J. Reforming health care of seven OECD countries. Hlth Affairs 1991;10:7-21. 4 Roemer Ml. National health systems of the world. Volume 1: the countries. Oxford: Oxford University Press, 1991. 5 Altenstetter C, Haywood SC, editors. Comparative health policy and the new right. London: MacMillan, 1991. 6 Ham C, Robinson R, Benzeval M. Health check: health policy in an international perspective. London: King's Fund Institute, 1990. 7 Field MG, editor. Success and crisis in national health systems: a comparative approach. New York: Routledge, 1989. 8 Immergut EM. Health politics: interests and institutions in Western Europe. Cambridge: Cambridge University Press, 1992. 9 White J. Competing solutions. Washington: Brookings Institution, 1995. 10 Jerome-Forget M, White J, Weiner JM, editors. Health care reform through internal markets: experience and proposals. Washington: Brookings Institution, 1995. 11 Saltman RB, von Otter C. Planned markets and public competition: strategic reform in northern European health systems. Buckingham: Open University Press, 1992. 12 Saltman RB, von Otter C. Implementing planned markets in health care: balancing economic and social responsibility. Buckingham, UK: Open University Press, 1995. 13 Wesson A, Powell F, editors. Health care reforms: international experience. Baltimore: Johns Hopkins University Press, 1996. 14 World Health Organization. European health care reforms: analysis of current strategies. Copenhagen: WHO, 1996. 15 Glaser WA. Paying the hospital. San Francisco: Jossey-Bass, 1987. 16 Glaser WA. Health insurance in practice. San Francisco: Jossey-Bass, 1991. 17 Navarro V. Why some countries have national health insurance, others have national health services, and the United States has neither. Soc Sci Med 1989;28(9):887-98. 18 Robinson R, LeGrand J, editors. Evaluating the national health service reforms. Newbury, UK: Policy Journals, 1994. 19 Abel-Smith B, Figueras J, Holland W, McKee M, Mossialos E. Choices in health policy: an agenda for the European Union. London: Dartmouth Publishers, 1995. 20 Schwartz F-W, Glennerster H, Saltman RB, editors. Fixing health budgets: experience from Europe and North America. London: Wiley Publishers, 1996. 21 Saltman RB, Kane NM, editors. Comparative experience in pharmaceutical and home care policy. Hlth Policy, Supplement: in press. 22 Field M. Comparative health systems and the convergence hypothesis: the dialects of universalism and particularism. In: Wesson A, Powell F, editors. Health care reform: international experience. Baltimore: Johns Hopkins University Press, 1998: in press.

23 Abel-Smith B. Health reform: old wine in new bottles. LSEHIth 1995; 1:7-9. 24 Chernichovsky D. Health system reforms in industrialized democracies: an emerging paradigm. Milbank Q 1995;73(3):339-72. 25 Wilsford D. States facing interests: struggles over health care policy in advanced industrial democracies. J Hlth Politics Policy Law 1995;20(3):571-614. 26 Granovetter M. Economic action and social structure: the problem of embeddedness. Am J Sociol 1985;91(3):481-510. 27 Contandriopoulos A-P, Lauristan M. Values and norms in health policy. In: Saltman RB, Figueras J, Sakellarides C, editors. Critical challenges in European health policy. Buckingham: Open University press, 1998: in press. 28 Elling R. Theory and method for the cross-national study of health services. Int J Hlth Serv 1994;24(2):285-309. 29 Crabb MK. Health policy: data in search of a theory. Mimeo, 1995. 30 Von Otter C. The application of market principles to health care. In: Hunter DJ, editor. Paradoxes of competition for health. Leeds: Nuffield Institute, University of Leeds, 1991. 31 Kassirer JP. Managed care and the morality of the marketplace. New Engl J Med 1995;333:50-2. 32 World Health Organization. Regional targets in support of the regional strategy for health for all. Copenhagen: WHO, 1984. 33 Buchanan JM. Cost and choice: an inquiry in economic theory. Chicago: Markham, 1969. 34 Brommels M. Contracting and political boards in planned markets. In: Saltman RB, von Otter C, editors. Implementing planned markets in health care: balancing social and economic responsibility. Buckingham, UK: Open University Press, 1995:86-112. 35 Saltman RB. A conceptual overview of health system reforms. Eur J Public Hlth 1994;4:287-93. 36 World Health Organization. Health policy in Finland: a review. Copenhagen: WHO, 1990. 37 Rosenberg ML, O'Carroll PW, Powell KE. Let's be clear: violence is a public health problem. J Am Med Assoc 1992;267:3072-3. 38 Atlanta Constitution. Gun lobby happy over 1995 successes. 22 November 1995. 39 Evans R. Tension, compression and shear: directions, stresses, and outcomes of health care cost control. J Hlth Politics Policy Law 1990;15:101-28. 40 Payer L. Medicine and culture: varieties of treatment in the United States, England, West Germany, and France. New York: H. Holt, 1988. 41 Evans R, Barer ML, Marmor TR, editors. Why are some people healthy and others not? New York: Aldine de Gruyter, 1995. 42 Rodwin VG, Sandier S. Health care under French national health insurance. Hlth Affairs 1993,12:111-31. 43 Kutzin J. The appropriate role for copayments. In: Saltman RB, Figueras JF, Sakellarides C, editors. Critical challenges for European health policy. Buckingham: Open University Press, 1998: in press. 44 Massaro TA, Wong Y-N. Positive experience with MSAs in Singapore. Hlth Affairs 1995; 14:267-72. 45 Pauly M, Goodman JC. Tax credits for health insurance and medical savings accounts. Hlth Affairs 1995;14:125-39. 46 Hsiao WC. Medical savings accounts: lessons from Singapore. Hlth Affairs 1995; 14:260-6.