Difference between Regulatory and Allocative Health Policies

Difference between Regulatory and Allocative Health Policies. In advancing the health and wellbeing of different population groups and achieving the desired objectives, there must be timely and justified health policies. The policies are usually the initiatives and decisions directed towards implementing changes to the practices of existing care provision to extend benefits to different stakeholder groups. Considering the changes at the governance level and in the provision of healthcare services, policy in such areas is dynamic. The two types of health policies are regulatory and allocative, but they both follow policy implementation components.

How can health policies be used as regulatory?

Regulatory policies

The regulatory policies are the rules or regulations that seek to impose particular restrictions to control the behavior of the targeted group. The health policies seek to monitor the group’s behavior and impose the necessary sanctions should compliance fail (Shi, 2019). The sanctions can be in the form of fines, civil or criminal liability, and other approaches. The regulatory policies demand that specific instructions be met in line with fulfilling particular public health objectives.

Some examples of regulatory policies include a prohibition of smoking in public areas, imposing licensure requirements for certain professions, and demanding certain processes to approve new drugs. Another example is that insurance departments within states are responsible for regulating the health insurance companies with a focus on protecting consumers.

The regulatory policies can also be from the private sector. The private health sector also engages in policy-making, which means that organizations develop regulatory policies. Examples include the accreditation service organizations that engage in assessments to ensure compliance with the defined standards. On the other hand, the agencies in the health sector can define the regulatory policies on the types of services that each healthcare organization is expected to meet.

Regulatory policies have a basis on legal, economic, public management, and health principles. Considering such principles implies that a governing authority cannot define a regulatory policy without considering its legal and economic implications. One of the underlying considerations is the cost-benefit of the policy under exploration, which seeks to ensure that the relevant stakeholders can derive maximum benefits.

Regulatory health policies fall into five basic categories that include;

• Social regulation
• Market entry restrictions
• Quality controls in health services provision
• Controls for market preservation
• Rate or price setting on service providers in health

The different categories address health service providers’ social and economic aspects. The essential focus is on reducing the negative externalities related to producing and consuming goods and services. Quality control, another category of regulatory policies, seeks to ensure that providers adhere to defined and acceptable quality levels.

Allocative health policies

Unlike regulatory policies, allocative policies focus on the actual provision of goods, services, and other resources to improve health access. According to Shi (2014), the essence of allocative policies is to spread benefits and resources or redistribute them to protect vulnerable groups and maintain the essence of social justice. Within the United States, an example of an allocative policy is Medicaid which involves the taxation of the public and the provision of free health insurance to those who would not afford otherwise. In this regard, the consideration is that allocative policies provide net benefits to particular groups at the expense of others.

Within the context of allocative policies, subsidies emerge as core elements. The essence of subsidies in health policy making is to alter the demand and supply of certain products and services. An example is that there has been heavy subsidizing of the medical education system based on the idea that there would be an undersupply of medical professionals without such subsidies. The government has in the past also subsidized the construction of hospitals to ensure sufficient supply, especially in highly populated areas.

Importantly, subsidies under allocative policies do not seek to address the plight of the vulnerable groups alone. Federal funding for health services of veterans and native Americans addresses the needs of disadvantaged groups, but the support of medical education seeks to benefit all groups. The redistribution of resources is the defining factor for allocative health policies.

Despite the different inclinations of regulatory and allocative policies, they both seek to meet the defined health objectives. Health policies impact health based on the effect of health determinants. The regulatory and allocative policies may have different approaches but focus on influencing healthy environments for the well-being of different populations. It is important to note that the policies consider the health aspect and elements linked to economic, legal, social, and public management.