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Enhancing performance in health care: a theoretical perspective on agency and the role of information

  • Maria Goddard

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

  • Russell Mannion

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

  • Peter Smith

This paper examines the role of information in securing control of health care systems. The discussion focuses on the impact of the proposed 'Performance Framework', which entails a significant increase in the importance attached to formal performance indicators in the management of the UK National Health Service. The paper starts with a discussion of the role of performance data in securing organizational control within health care systems and summarizes recent research into the behavioural consequences of seeking to control health care agents using such information. A theoretical principal|agent model is then used to illustrate the incentives that exist for dysfunctional behaviour within health care when only imperfect information systems are available. The theoretical results are then examined in the context of a qualitative empirical study, which elicited the perceptions of managers and health care professionals connected with eight NHS hospitals. The study confirmed the existence and importance of serious dysfunctional consequences arising from the use of information as a means of control, and concludes that the Performance Framework will be successful only if it is used in careful conjunction with other means of control. Copyright © 2000 John Wiley & Sons, Ltd.

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Article provided by John Wiley & Sons, Ltd. in its journal Health Economics.

Volume (Year): 9 (2000)
Issue (Month): 2 ()
Pages: 95-107

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Handle: RePEc:wly:hlthec:v:9:y:2000:i:2:p:95-107
Contact details of provider: Web page: http://www3.interscience.wiley.com/cgi-bin/jhome/5749

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  1. Maria Goddard & Russell Mannion, 1998. "From competition to co-operation: new economic relationships in the National Health Service," Health Economics, John Wiley & Sons, Ltd., vol. 7(2), pages 105-119.
  2. Andreoni, J. & Erard, B. & Feinstein, J., 1996. "Tax Compliance," Working papers 9610r, Wisconsin Madison - Social Systems.
  3. Kornai, Janos, 1992. "The Socialist System: The Political Economy of Communism," OUP Catalogue, Oxford University Press, number 9780198287766, March.
  4. Darvish, Tikva & Kahana, Nava, 1989. "The ratchet principle : A multi-period flexible incentive scheme," European Economic Review, Elsevier, vol. 33(1), pages 51-57, January.
  5. William G. Ouchi, 1979. "A Conceptual Framework for the Design of Organizational Control Mechanisms," Management Science, INFORMS, vol. 25(9), pages 833-848, September.
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