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

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  • Maria Goddard

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

  • Russell Mannion

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

  • Peter Smith

Abstract

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.

Suggested Citation

  • Maria Goddard & Russell Mannion & Peter Smith, 2000. "Enhancing performance in health care: a theoretical perspective on agency and the role of information," Health Economics, John Wiley & Sons, Ltd., vol. 9(2), pages 95-107.
  • Handle: RePEc:wly:hlthec:v:9:y:2000:i:2:p:95-107 DOI: 10.1002/(SICI)1099-1050(200003)9:2<95::AID-HEC488>3.0.CO;2-A
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    References listed on IDEAS

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    1. William G. Ouchi, 1979. "A Conceptual Framework for the Design of Organizational Control Mechanisms," Management Science, INFORMS, vol. 25(9), pages 833-848, September.
    2. 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.
    3. Kornai, Janos, 1992. "The Socialist System: The Political Economy of Communism," OUP Catalogue, Oxford University Press, number 9780198287766.
    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. James Andreoni & Brian Erard & Jonathan Feinstein, 1998. "Tax Compliance," Journal of Economic Literature, American Economic Association, pages 818-860.
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    Citations

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    Cited by:

    1. Houyuan Jiang & Zhan Pang & Sergei Savin, 2012. "Performance-Based Contracts for Outpatient Medical Services," Manufacturing & Service Operations Management, INFORMS, vol. 14(4), pages 654-669, October.
    2. Meijboom, Bert & de Haan, Job & Verheyen, Piet, 2004. "Networks for integrated care provision: an economic approach based on opportunism and trust," Health Policy, Elsevier, vol. 69(1), pages 33-43, July.
    3. Joanna Coast, 2001. "Citizens, their agents and health care rationing: an exploratory study using qualitative methods," Health Economics, John Wiley & Sons, Ltd., vol. 10(2), pages 159-174.
    4. Abigail Barr & Magnus Lindelow & Pieter Serneels, 2003. "To serve the community or oneself: the public servant's dilemma," CSAE Working Paper Series 2003-11, Centre for the Study of African Economies, University of Oxford.
    5. Kristensen, Søren Rud & Siciliani, Luigi & Sutton, Matt, 2016. "Optimal price-setting in pay for performance schemes in health care," Journal of Economic Behavior & Organization, Elsevier, vol. 123(C), pages 57-77.
    6. Pascal Courty & Gerald Marschke, 2003. "Making Government Accountable: Lessons from a Federal Job Training Program," The Centre for Market and Public Organisation 03/083, Department of Economics, University of Bristol, UK.
    7. Gianluca Fiorentini & Elisa Iezzi & Matteo Lippi Bruni & Cristina Ugolini, 2011. "Incentives in primary care and their impact on potentially avoidable hospital admissions," The European Journal of Health Economics, Springer;Deutsche Gesellschaft für Gesundheitsökonomie (DGGÖ), vol. 12(4), pages 297-309, August.
    8. Nils Gutacker & Andrew Street, 2015. "Multidimensional performance assessment using dominance criteria," Working Papers 115cherp, Centre for Health Economics, University of York.
    9. Ssengooba, Freddie & McPake, Barbara & Palmer, Natasha, 2012. "Why performance-based contracting failed in Uganda – An “open-box” evaluation of a complex health system intervention," Social Science & Medicine, Elsevier, vol. 75(2), pages 377-383.
    10. Iezzi, Elisa & Lippi Bruni, Matteo & Ugolini, Cristina, 2014. "The role of GP's compensation schemes in diabetes care: Evidence from panel data," Journal of Health Economics, Elsevier, vol. 34(C), pages 104-120.
    11. Gross, Revital, 2004. "A consumer-based tool for evaluating the quality of health services in the Israeli health care system following reform," Health Policy, Elsevier, vol. 68(2), pages 143-158, May.
    12. Peter C. Smith & Andrew Street, 2012. "Concepts and Challenges in Measuring the Performance of Health Care Organizations," Chapters,in: The Elgar Companion to Health Economics, Second Edition, chapter 32 Edward Elgar Publishing.
    13. Kuhn, Michael & Siciliani, Luigi, 2007. "Performance Indicators for Quality with Adverse Selection, Gaming and Inequality Aversion," CEPR Discussion Papers 6261, C.E.P.R. Discussion Papers.
    14. Antti Peltokorpi, 2011. "How do strategic decisions and operative practices affect operating room productivity?," Health Care Management Science, Springer, vol. 14(4), pages 370-382, November.

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