Decentralisation Strategies and Provider Incentives in Healthcare: Evidence from the English National Health Service
Abstract
Introduction: This article examines the incentive effects of delegating operational and financial decision making from central government to local healthcare providers. It addresses the economic consequences of a contemporary policy initiative in the English National Health Service (NHS) - earned autonomy. This policy entails awarding operational autonomy to `front-line' organisations that are assessed to be meeting national performance targets. In doing so, it introduces new types of incentives into the healthcare system, changes the nature of established agency relationships and represents a novel approach to performance management. Methods: Theoretical elements of a principal-agent model are used to examine the impact of decentralisation in the context of the results of an empirical study that elicited the perceptions of senior hospital managers regarding the incentive effects of earned autonomy. A multi-method approach was adopted. In order to capture the breadth of policy impact, we conducted a national postal questionnaire survey of all Chief Executives in acute-care hospital Trusts in England (n = 173). To provide added depth and richness to our understanding of the impact and incentive effects of earned autonomy at an organisational level, we interviewed senior managers in a purposeful sample of eight acute-care hospital Trusts. Results: This theoretical framework and our empirical work suggest that some aspects of the earned autonomy as currently implemented in the NHS serve to weaken the potential incentive effect of decentralisation. In particular, the nature of the freedoms is such that many senior managers do not view autonomy as a particularly valuable prize. This suggests that incentives associated with the policy will be insufficiently powerful to motivate providers to deliver better performance. We also found that principal commitment may be a problem in the NHS. Some hospital managers reported that they already enjoyed a large degree of autonomy, regardless of their current performance ratings. We also found evidence that the objectives of providers may differ from those of both the central government and local purchasers. There is, therefore, a risk that granting greater autonomy will allow providers to pursue their own objectives which, whilst not self-serving, may still jeopardise the achievement of strategic goals. Conclusion: It is apparent that the design and implementation features of decentralising policies such as earned autonomy require careful attention if an optimal balance is to be struck between central oversight and local autonomy in the delivery of healthcare.Download Info
If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.
Bibliographic Info
Article provided by Springer Healthcare | Adis in its journal Applied Health Economics and Health Policy.
Volume (Year): 4 (2005)
Issue (Month): 1 ()
Pages: 47-54
Download reference. The following formats are available: HTML
(with abstract),
plain text
(with abstract),
BibTeX,
RIS (EndNote, RefMan, ProCite),
ReDIF
Handle: RePEc:wkh:aheahp:v:4:y:2005:i:1:p:47-54
Contact details of provider:
Web page: http://healtheconomics.adisonline.com/
For corrections or technical questions regarding this item, or to correct its listing, contact: (Dave Dustin).
Related research
Keywords: Health-policy;Find related papers by JEL classification:
- C - Mathematical and Quantitative Methods
- D - Microeconomics
- I - Health, Education, and Welfare
- Z - Other Special Topics
- I1 - Health, Education, and Welfare - - Health
- I19 - Health, Education, and Welfare - - Health - - - Other
- I18 - Health, Education, and Welfare - - Health - - - Government Policy; Regulation; Public Health
- I11 - Health, Education, and Welfare - - Health - - - Analysis of Health Care Markets
References
No references listed on IDEASYou can help add them by filling out this form.
Citations
Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.Cited by:
- Rossella Verzulli & Rowena Jacobs & Maria Goddard, 2011. "Do hospitals respond to greater autonomy? Evidence from the English NHS," Working Papers 064cherp, Centre for Health Economics, University of York.
Lists
This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.Statistics
Access and download statisticsCorrections
When requesting a correction, please mention this item's handle: RePEc:wkh:aheahp:v:4:y:2005:i:1:p:47-54For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Dave Dustin).
If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.
If references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.
If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.