Can public healthcare afford marketization? Market principles, mechanisms, and effects in five health systems

Policymakers now have four decades’ experience using marketization to address cost and quality problems in public‐sector health services. While much is known about the challenges, it is difficult to draw lessons because there remains no agreed‐upon definition of marketization. This article contributes a definition that focuses on the transaction, particularly the effects of funding arrangements on the intensity of competition among providers. Based on prior literature and 106 interviews with practitioners and researchers in 5 countries, the authors contribute a systematization of 12 concrete market mechanisms enacting 3 market principles. Furthermore, the authors analyze respondents’ perceptions of healthcare marketization's effects on costs and quality. While marketization is a multi‐faceted, sometimes ambiguous phenomenon requiring further research before definite conclusions can be reached, most statements from our respondents about cost and quality effects were negative.