Big Bang and the Policy Prescription: Health Care Meets the Market in New Zealand

Abstract

This article discusses events that led up to and the aftermath of New Zealand's radical health sector restructuring of 1993. It suggests that "big bang" policy change facilitated the introduction of a set of market-oriented ideas describable as a policy prescription. In general, the new system performed poorly, in keeping with problems of market failure endemic in health care. The system was subsequently restructured, and elements of the 1993 structures were repackaged through a series of incremental changes. Based on the New Zealand experience, big bang produces change but not necessarily a predictive model, and the policy prescription has been oversold.

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