When does and doesn’t privatization work?

Austin Frakt

January 16, 2013

People love to debate this question, particularly when it comes to health care. If you’re among them, read Eduardo Porter’s recent NYT article, in which he discusses The Org: The Underlying Logic of the Office, by Ray Fisman and Tim Sullivan. Porter quotes Fisman,

If I can write a perfect contract in which I pay for a concrete observable outcome, can rule out cream-skimming and can ensure the measure is not gamed, there is no reason that the private sector can’t do it better.

Is this a fair test? What’s its sensitivity and specificity? Does it rule in or out health care or health insurance?

@afrakt

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Austin Frakt

Austin Frakt, PhD, is co-Editor-in-Chief of The Incidental Economist. His day job is Associate Director of the Partnered Evidence-based Policy Resource Center at the Boston VA Healthcare System, U.S. Department of Veterans Affairs. He is also a Professor with the Department of Health Law, Policy and Management at the Boston University’s School of Public Health, a Principal Research Scientist with the Department of Health Policy and Management at the Harvard T.H. Chan School of Public Health, and Editor-in-Chief of the journal Health Services Research.

When does and doesn’t privatization work?

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Austin Frakt

The Incidental Economist

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