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Abstract

Following major reforms of the British National Health Service (NHS) in 1990, the roles of purchasing and providing health services were separated, with the relationship between purchasers and providers governed by contracts. Using a mixed multinomial logit analysis, we show how this policy shift led to a selection of contracts that is consistent with the predictions of a simple model, based on contract theory, in which the characteristics of the health services being purchased and of the contracting parties influence the choice of contract form. The paper thus provides evidence in support of the practical relevance of theory in understanding health care market reform.

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File URL: http://repo.sire.ac.uk/handle/10943/56
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Bibliographic Info

Paper provided by Scottish Institute for Research in Economics (SIRE) in its series SIRE Discussion Papers with number 2008-43.

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Date of creation: 2008
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Handle: RePEc:edn:sirdps:56

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Related research

Keywords: health services; British NHS; physician agency; financial incentive;

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Find related papers by JEL classification:

• I11 - Health, Education, and Welfare - - Health - - - Analysis of Health Care Markets

References

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Cited by:

1. Eleonora Fichera & Hugh Gravelle & Mario Pezzino & Matt Sutton, 2012. "Specification of financial incentives for quality in health care contracts," The School of Economics Discussion Paper Series 1218, Economics, The University of Manchester.

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