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Choice of contracts for quality in health care: Evidence from the British NHS

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Author Info

  • Eleonora Fichera

    (Manchester Centre for Health Economics, University of Manchester, UK)

  • Hugh Gravelle

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

  • Mario Pezzino

    (Economics, School of Social Sciences, University of Manchester, UK)

  • Matt Sutton

    (Institute of Population Health, Manchester Centre for Health Economics, University of Manchester, UK)

Abstract

We examine how public sector third-party purchasers and hospitals negotiate quality targets when a fixed proportion of hospital revenue is required to be linked to quality. We develop a bargaining model linking the number of quality targets to purchaser and hospital characteristics. Using data extracted from 153 contracts for acute hospital services in England in 2010/11, we find that the number of quality targets is determined by the purchaser's population health and its budget, the hospital type, whether the purchaser delegated negotiation to an agency, and the quality targets imposed by the supervising regional health authority.

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File URL: http://www.york.ac.uk/media/che/documents/papers/researchpapers/CHERP85_contract_choice_quality_healthcare_NHS.pdf
File Function: First version, 2013
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Bibliographic Info

Paper provided by Centre for Health Economics, University of York in its series Working Papers with number 085cherp.

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Length: 33 pages
Date of creation: Jun 2013
Date of revision:
Handle: RePEc:chy:respap:85cherp

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Keywords: Contracts; quality; financial incentives; pay for performance; hospitals; Nash bargaining;

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  1. Csaba, Ivan & Fenn, Paul, 1997. "Contractual choice in the managed health care market An empirical analysis," Journal of Health Economics, Elsevier, vol. 16(5), pages 579-588, October.
  2. Martin Emmert & Frank Eijkenaar & Heike Kemter & Adelheid Esslinger & Oliver Schöffski, 2012. "Economic evaluation of pay-for-performance in health care: a systematic review," The European Journal of Health Economics, Springer, vol. 13(6), pages 755-767, December.
  3. Jeffrey M Wooldridge, 2010. "Econometric Analysis of Cross Section and Panel Data," MIT Press Books, The MIT Press, edition 2, volume 1, number 0262232588, December.
  4. Barros, Pedro Pita & Martinez-Giralt, Xavier, 2008. "Selecting health care providers: "Any willing provider" vs. negotiation," European Journal of Political Economy, Elsevier, vol. 24(2), pages 402-414, June.
  5. Luigi Siciliani & Anderson Stanciol, 2008. "Bargaining and the Provision of Health Services," Discussion Papers 08/28, Department of Economics, University of York.
  6. Fenn, Paul & Rickman, Neil & McGuire, Alistair, 1994. "Contracts and supply assurance in the UK health care market," Journal of Health Economics, Elsevier, vol. 13(2), pages 125-144, July.
  7. Petsoulas, Christina & Allen, Pauline & Hughes, David & Vincent-Jones, Peter & Roberts, Jennifer, 2011. "The use of standard contracts in the English National Health Service: A case study analysis," Social Science & Medicine, Elsevier, vol. 73(2), pages 185-192, July.
  8. Chalkley, Martin, 2008. "Choice of Contracts in the British National Health Service: An Empirical Study," SIRE Discussion Papers 2008-43, Scottish Institute for Research in Economics (SIRE).
  9. Williamson, Oliver E, 1983. "Credible Commitments: Using Hostages to Support Exchange," American Economic Review, American Economic Association, vol. 73(4), pages 519-40, September.
  10. Shaban, Radwan Ali, 1987. "Testing between Competing Models of Sharecropping," Journal of Political Economy, University of Chicago Press, vol. 95(5), pages 893-920, October.
  11. Robert Elliott & Ada Ma & Matt Sutton & Diane Skatun & Nigel Rice & Stephen Morris & Alex McConnachie, 2010. "The role of the staff MFF in distributing NHS funding: taking account of differences in local labour market conditions," Health Economics, John Wiley & Sons, Ltd., vol. 19(5), pages 532-548.
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