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Do financial incentives trump clinical guidance? Hip Replacement in England and Scotland

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  • Papanicolas, Irene
  • McGuire, Alistair

Abstract

Following devolution in 1999 England and Scotland's National Health Services diverged, resulting in major differences in hospital payment. England introduced a case payment mechanism from 2003/4, while Scotland continued to pay through global budgets. We investigate the impact this change had on activity for Hip Replacement. We examine the financial reimbursement attached to uncemented Hip Replacement in England, which has been more generous than for its cemented counterpart, although clinical guidance from the National Institute for Clinical Excellence recommends the later. In Scotland this financial differential does not exist. We use a difference-in-difference estimator, using Scotland as a control, to test whether the change in reimbursement across the two countries had an influence on treatment. Our results indicate that financial incentives are directly linked to the faster uptake of the more expensive, uncemented Hip Replacement in England, which ran against the clinical guidance.

Suggested Citation

  • Papanicolas, Irene & McGuire, Alistair, 2015. "Do financial incentives trump clinical guidance? Hip Replacement in England and Scotland," Journal of Health Economics, Elsevier, vol. 44(C), pages 25-36.
  • Handle: RePEc:eee:jhecon:v:44:y:2015:i:c:p:25-36
    DOI: 10.1016/j.jhealeco.2015.08.001
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    References listed on IDEAS

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    Cited by:

    1. James Gaughan & Nils Gutacker & Katja Grasic & Noemi Kreif & Luigi Siciliani & Andrew Street, 2018. "Paying for Efficiency: Incentivising same-day discharges in the English NHS," Working Papers 157cherp, Centre for Health Economics, University of York.
    2. Surana, Mitul & Dongre, Ambrish, 2018. "Too much care? Private health care sector and surgical interventions during childbirth in India," IIMA Working Papers WP 2018-11-01, Indian Institute of Management Ahmedabad, Research and Publication Department.
    3. Aleksandr Proshin & Alexandre Cazenave-Lacroutz & Zeynep Or & Lise Rochaix, 2018. "Impact of Diagnosis Related Group Refinement on the Choice Between Scheduled Caesarean Section and Normal Delivery: Recent Evidence from France," PSE Working Papers halshs-01812107, HAL.
    4. Rowena Jacobs & Martin Chalkley & María José Aragón & Jan R. Böhnke & Mike Clark & Valerie Moran & Simon Gilbody, 2016. "Funding of mental health services: Do available data support episodic payment?," Working Papers 137cherp, Centre for Health Economics, University of York.

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