An analysis of hospital capital planning and financing in three European countries: Using the principal-agent approach to identify the potential for economic problems

Objective To explore differences in national approaches to hospital capital planning and financing in three European countries and to understand the roles and positions of the actors involved.Methods Case studies of major new hospital developments were undertaken in each of the study countries (France, Sweden and England), based on a review of documents related to each development and the national framework within which they took place, as well as interviews with key informants. The principal-agent model was used, focusing on identification of differing utilities and information asymmetries.Results There are substantial differences between countries, for example in relation to the role of the hospital in its own redevelopment, the organisational distance between actors, the institutional level at which decision rights for major investments are exercised, and how principals control the agents. These differences have implications for the processes involved and the nature of economic and health care problems that can arise.Conclusions There is evidence of, and opportunity for economic problems in all systems but these seems to be greater in France and England where the hospital leads the process, where there is limited involvement by the regional bodies, and informational differences appear greater. We conclude that hospital planning processes should be informed by an explicit understanding of the powerful groups involved and their divergent preferences and utilities.