Tensions often occur when decision rights are not extended to managers (for example,
when political pressure makes it impossible to dismiss staff), when accountability mechanisms
are neither built into long-term contracts nor enforced through market discipline,
and when the providers are not allowed to retain their surpluses or made responsible for
their losses. The latter undermines the incentive to economize.
There is still considerable debate about whether long-term contracts with private providers
create better incentives than similar contracts with public providers. Which incentives
are most appropriate may depend on which goals have priority. The global trend is to
try to avoid the inefficiencies and unresponsiveness that occur when a hierarchy becomes
too rigid, while avoiding the opposite extreme of unregulated markets. The latter almost
always undermine financial protection and may interfere with the strategic coordination
needed to provide effective care.