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This paper constitutes the first and foundational output of the ESHCRU2 project 3 - Analysis of purcher-provider contracts: modelling risk sharing and incentive implications. In this project, we have focused on the implications of payment reform of what is called blended payment for emergency care. This paper sets out the theoretical model developed to understand how behavioural choices could be influenced by this payment reform. We construct a framework in which two organisations - a hospital and a purchaser - influence respectively admissions from, and attendance at, emergency departments. These decisions are each influenced by the payment system and interact to determine an equilibrium. We show how the equilibrium is affected by the characteristics of the hospital and the purchaser and how it will be changed by shifting towards a greater reliance on fixed payment. We further establish what outcomes (in terms of admissions and attendances) can be sustained as an equilibrium under different parameters of the payment system

Author

Listed:
  • Martin Chalkley

    (Centre for Health Economics, University of York, York, UK.)

  • Hugh Gravelle

    (Centre for Health Economics, University of York, York, UK.)

  • Nikita Jacob

    (Centre for Health Economics, University of York, York, UK.)

  • Rita Santos

    (Centre for Health Economics, University of York, York, UK.)

  • Luigi Siciliani

    (Department of Economics and Related Studies, University of York, UK)

Abstract

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Suggested Citation

  • Martin Chalkley & Hugh Gravelle & Nikita Jacob & Rita Santos & Luigi Siciliani, 2022. "This paper constitutes the first and foundational output of the ESHCRU2 project 3 - Analysis of purcher-provider contracts: modelling risk sharing and incentive implications. In this project, we have ," Working Papers 187cherp, Centre for Health Economics, University of York.
    • Handle: RePEc:chy:respap:187cherp
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    File URL: https://www.york.ac.uk/media/che/documents/papers/researchpapers/CHERP187_payment_reform_healthcare_systems.pdf
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    References listed on IDEAS

    as
    1. Chalkley, Martin & Malcomson, James M., 1998. "Contracting for health services when patient demand does not reflect quality," Journal of Health Economics, Elsevier, vol. 17(1), pages 1-19, January.
    2. Ching-to Albert Ma, 1997. "Cost and Quality Incentives in Health Care: Altruistic Providers," Papers 0084, Boston University - Industry Studies Programme.
    3. Oddvar Kaarboe & Luigi Siciliani, 2011. "Multi‐tasking, quality and pay for performance," Health Economics, John Wiley & Sons, Ltd., vol. 20(2), pages 225-238, February.
    4. Culyer, A J, 1989. "The Normative Economics of Health Care Finance and Provision," Oxford Review of Economic Policy, Oxford University Press and Oxford Review of Economic Policy Limited, vol. 5(1), pages 34-58, Spring.
    5. Karen Eggleston, 2009. "Provider payment incentives: international comparisons," International Journal of Health Economics and Management, Springer, vol. 9(2), pages 113-115, June.
    6. Chalkley, Martin & Malcomson, James M, 1998. "Contracting for Health Services with Unmonitored Quality," Economic Journal, Royal Economic Society, vol. 108(449), pages 1093-1110, July.
    7. Ma, Ching-to Albert, 1994. "Health Care Payment Systems: Cost and Quality Incentives," Journal of Economics & Management Strategy, Wiley Blackwell, vol. 3(1), pages 93-112, Spring.
    8. Joel Slemrod & Shlomo Yitzhaki, 1996. "The Costs of Taxation and the Marginal Efficiency Cost of Funds," IMF Staff Papers, Palgrave Macmillan, vol. 43(1), pages 172-198, March.
    9. Fainman, Emily Zhu & Kucukyazici, Beste, 2020. "Design of financial incentives and payment schemes in healthcare systems: A review," Socio-Economic Planning Sciences, Elsevier, vol. 72(C).
    10. Jack, William, 2005. "Purchasing health care services from providers with unknown altruism," Journal of Health Economics, Elsevier, vol. 24(1), pages 73-93, January.
    11. Chris Jones, 2005. "Why the Marginal Social Cost of Funds is not the Shadow Value of Government Revenue," ANU Working Papers in Economics and Econometrics 2005-449, Australian National University, College of Business and Economics, School of Economics.
    12. Ching‐to Albert Ma, 1998. "Health‐Care Payment Systems: Cost and Quality Incentives—Reply," Journal of Economics & Management Strategy, Wiley Blackwell, vol. 7(1), pages 139-142, March.
    Full references (including those not matched with items on IDEAS)

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