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

Author

Listed:
  • 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.

Suggested Citation

  • Eleonora Fichera & Hugh Gravelle & Mario Pezzino & Matt Sutton, 2013. "Choice of contracts for quality in health care: Evidence from the British NHS," Working Papers 085cherp, Centre for Health Economics, University of York.
    • Handle: RePEc:chy:respap:85cherp
    as

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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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    References listed on IDEAS

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    Cited by:

    1. Gravelle, Hugh & Santos, Rita & Siciliani, Luigi, 2014. "Does a hospital's quality depend on the quality of other hospitals? A spatial econometrics approach," Regional Science and Urban Economics, Elsevier, vol. 49(C), pages 203-216.

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    More about this item

    Keywords

    Contracts; quality; financial incentives; pay for performance; hospitals; Nash bargaining;
    All these keywords.

    JEL classification:

    • I11 - Health, Education, and Welfare - - Health - - - Analysis of Health Care Markets
    • I18 - Health, Education, and Welfare - - Health - - - Government Policy; Regulation; Public Health
    • L51 - Industrial Organization - - Regulation and Industrial Policy - - - Economics of Regulation
    • C35 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Discrete Regression and Qualitative Choice Models; Discrete Regressors; Proportions

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