As Vietnam opens its economy to privatization, its system of healthcare will face a series of crucial tests. Vietnam's system of private healthcare -- once comprised only of individual physicians holding clinic hours in their homes -- has come to also include larger customer-oriented clinics based on an American business model. As the two models compete in the expanding private market, it becomes increasingly important to understand patients' perceptions of the alternative models of care.

This study reports on interviews with 194 patients in two different types of private-sector clinics in Vietnam: a western-style clinic and a traditional style, after-hours clinic. In bivariate and multivariate analyses, we found that patients at the western style clinic reported both higher expectations of the facility and higher satisfaction with many

aspects of care than patients at the after-hours clinic. These different perceptions appear to be based on the interpersonal manner of the physician seen and the clinic's delivery methods rather than perceptions of the physician's technical skill and method of treatment. These fndings were unaffected by the ethnicity of physician seen.

These fndings suggest that patients in Vietnam recognize and prefer more customer-oriented care and amenities, regardless of physician ethnicity and perceive no signiccant differences in technical skill between the private delivery models.

This issue of CHP/PCOR's quarterly newsletter, which covers news from the fall 2005 quarter, includes articles about:

• a study concluding that the implantable cardioverter defibrillator -- one of the most expensive medical devices on the market -- is worth its high cost, in appropriate patients, because it prevents sudden cardiac deaths;
• the evolution and broad application of the Quality Indicators, a set of practical tools developed by CHP/PCOR researchers that are used by hundreds of U.S. hospitals, medical groups, health insurers, state health agencies and business coalitions to screen for quality problems;
• a study finding that the Internet can be a valuable tool to help patients with stigmatized illnesses (such as mental illness) find information about and seek treatment for their illness;
• CHP/PCOR-hosted seminars on global health themes, given by Jack Chow of the World Health Organization -- who discussed combating malaria, TB and HIV/AIDS -- and Dean Jamison of the NIH's Fogarty International Center, who discussed evaluating countries' performance on health; and
• a prestigious national award won by two CHP/PCOR trainees at the annual meeting of the Society for Medical Decision Making.

The Pacific Business Group on Health (PBGH) Physician Performance Project seeks to promote system change by measuring individual physician quality, efficiency and patient experience. Reducing variation in physician practice patterns can significantly improve quality of care and moderate costs. As appropriate physician performance information becomes available to consumers, market pressure will become an effective mechanism for improving health care quality and efficiency. Key project goals include:

• Use of comparative performance information for quality improvement among physicians;
• Adoption of benefit designs that incent consumers to make informed health care choices;
• Promotion of financial incentives that reward high quality and efficient physicians in health plan contracting and payment systems;
• Make performance information publicly available for consumer choice.

The economic importance of innovation brings with it an active debate on the impact public policy has on the innovation process. This annual series, sponsored by the National Bureau of Economic Research, brings the work of leading academic researchers to the broader policy community. This volume considers such topics as the implications of software outsourcing for American technology leadership; the complementary roles of large corporations and entrepreneurs in developing innovative technology; city-level policy and planning that establishes a "jurisdictional advantage" in the value of local resources; the effect of taxes on entrepreneurship; and how to incorporate innovation into the analysis of business mergers. These papers highlight the role economic theory and empirical analysis can play in evaluating policies and programs regarding research, innovation, and the commercialization of new technologies.

The effort to discover and develop new pharmaceuticals is a risky and costly enterprise. For diseases that affect few patients, the barriers to development maybe especially great, since the drugs' small markets may make it difficult for firms to recoup their initial research and development investments. The Federal Government has sought to reduce these barriers through incentives first adopted in the Orphan Drug Act of 1983 (Public Law 97-414). The transfer of technology from Federal laboratories such as the National Institutes of Health to the pharmaceutical industry can also reduce the cost and risk of drug development for firms. Although such incentives may result in important new therapies, their price to patients and insurers may still be high.

As part of our assessment, Government Policies and Pharmaceutical Research and

Development, requested by the House Committee on Energy and Commerce and its

Subcommittee on Health and the Environment and the Subcommittee on Antitrust,

Monopolies, and Business Rights of the Senate Committee on the Judiciary, OTA

commissioned researchers at Stanford University to examine the development and provision of alglucerase, an important new treatment for Gaucher disease. Gaucher disease is a rare inherited disorder in which the body lacks an enzyme necessary to break down fats. This background paper describes the development of alglucerase, illustrates the role that both the Federal Government and private sector can have in making new therapies available for orphan diseases, and lays out some of the tradeoffs that can exist between developing new medical technologies and controlling health care costs.