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The Effects of Budgets on Doctors Behaviour: Evidence from a Natural Experiment

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  • Mark Dusheiko
  • Hugh Gravelle
  • Rowena Jacobs
  • Peter Smith

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Abstract

In many health care systems primary care physicians act as ‘gatekeepers’ to secondary care. We investigates the impact of the UK fundholding scheme under which general practices could elect to hold a budget to meet the costs of elective surgery for their patients. We use a differences in differences methodology on a large four year panel of English general practices before and after the abolition of fundholding. Fundholding incentives reduced fundholder elective admission rates by 3.3% and accounted for 57% of the difference between fundholder and nonfundholder elective admissions, with 43% a selection effect due to unobservable differences in practice characteristics. Fundholding had no effect on emergency admissions.

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Bibliographic Info

Paper provided by Department of Economics, University of Bristol, UK in its series The Centre for Market and Public Organisation with number 03/064.

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Length: 51 pages
Date of creation: Mar 2003
Date of revision:
Handle: RePEc:bri:cmpowp:03/064

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Keywords: budgets; health care; fundholding; admission rates;

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  1. Whynes, David K. & Ennew, Christine T. & Feighan, Teresa, 1999. "Entrepreneurial attitudes of primary health care physicians in the United Kingdom," Journal of Economic Behavior & Organization, Elsevier, vol. 38(3), pages 331-347, March.
  2. Hugh Gravelle & Peter C. Smith & Ana Xavier, . "Waiting Times and Waiting Lists: A Model of the Market for Elective Surgery," Discussion Papers 00/27, Department of Economics, University of York.
  3. Martin, Stephen & Smith, Peter C., 1999. "Rationing by waiting lists: an empirical investigation," Journal of Public Economics, Elsevier, vol. 71(1), pages 141-164, January.
  4. Lindsay, Cotton M & Feigenbaum, Bernard, 1984. "Rationing by Waiting Lists," American Economic Review, American Economic Association, vol. 74(3), pages 404-17, June.
  5. Richard Blundell & Monica Costa Dias, 2000. "Evaluation methods for non-experimental data," Fiscal Studies, Institute for Fiscal Studies, vol. 21(4), pages 427-468, January.
  6. Croxson, B. & Propper, C. & Perkins, A., 2001. "Do doctors respond to financial incentives? UK family doctors and the GP fundholder scheme," Journal of Public Economics, Elsevier, vol. 79(2), pages 375-398, February.
  7. Gravelle, Hugh & Dusheiko, Mark & Sutton, Matthew, 2002. "The demand for elective surgery in a public system: time and money prices in the UK National Health Service," Journal of Health Economics, Elsevier, vol. 21(3), pages 423-449, May.
  8. Propper, Carol & Wilson, Deborah & Soderlund, Neil, 1998. "The effects of regulation and competition in the NHS internal market: the case of general practice fundholder prices," Journal of Health Economics, Elsevier, vol. 17(6), pages 645-673, December.
  9. Croxson, Bronwyn & Propper, Carol & Shearer, Arran, 2000. "Waiting Times for Hospital Admissions: the Impact of GP Fundholding," CEPR Discussion Papers 2489, C.E.P.R. Discussion Papers.
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