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Establishing a Fair Playing Field for Payment by Results

Author

Listed:
  • Anne Mason

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

  • Marisa Miraldo

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

  • Luigi Siciliani

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

  • Peter Sivey

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

  • Andrew Street

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

Abstract

The English government has encouraged private providers – known as Independent Sector Treatment Centres (ISTCs) – to treat publicly funded (NHS) patients. Providers are paid a fixed price per patient treated, adjusted to reflect geographical differences in input costs. But there may be other legitimate cost variations between providers. This report considers the regulatory and production-process constraints that could cause public and private providers costs to differ. Most of these exogenous cost differentials can be rectified by adjustments to the regulatory system or to the payment method. We find evidence that ISTCs are treating different types of patients than NHS hospitals. If these differences drive costs, payments for treatment might need to be differentiated by setting.

Suggested Citation

  • Anne Mason & Marisa Miraldo & Luigi Siciliani & Peter Sivey & Andrew Street, 2008. "Establishing a Fair Playing Field for Payment by Results," Working Papers 039cherp, Centre for Health Economics, University of York.
  • Handle: RePEc:chy:respap:39cherp
    as

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    File URL: http://www.york.ac.uk/media/che/documents/papers/researchpapers/rp39_payment_by_results.pdf
    File Function: First version, 2008
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    References listed on IDEAS

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    1. Motta,Massimo, 2004. "Competition Policy," Cambridge Books, Cambridge University Press, number 9780521016919, May.
    2. Martin Feldstein, 1995. "Would Privatizing Social Security Raise Economic Welfare?," NBER Working Papers 5281, National Bureau of Economic Research, Inc.
    3. Martin Feldstein, 2005. "Rethinking Social Insurance," American Economic Review, American Economic Association, vol. 95(1), pages 1-24, March.
    4. Ellis, Randall P. & Vidal-Fernández, Marian, 2007. "Activity-based payments and reforms of the English hospital payment system," Health Economics, Policy and Law, Cambridge University Press, vol. 2(04), pages 435-444, October.
    5. Vassilis H. Aletras, 1999. "A comparison of hospital scale effects in short-run and long-run cost functions," Health Economics, John Wiley & Sons, Ltd., vol. 8(6), pages 521-530.
    6. Ellis, Randall P., 1998. "Creaming, skimping and dumping: provider competition on the intensive and extensive margins1," Journal of Health Economics, Elsevier, vol. 17(5), pages 537-555, October.
    7. Marini, Giorgia & Street, Andrew, 2007. "A transaction costs analysis of changing contractual relations in the English NHS," Health Policy, Elsevier, vol. 83(1), pages 17-26, September.
    8. Andrew Street & Kirsi Vitikainen & Afsaneh Bjorvatn & Anne Hvenegaard, 2007. "Introducing activity-based financing: a review of experience in Australia, Denmark, Norway and Sweden," Working Papers 030cherp, Centre for Health Economics, University of York.
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    Cited by:

    1. Klein-Hitpaß, Uwe & Scheller-Kreinsen, David, 2015. "Policy trends and reforms in the German DRG-based hospital payment system," Health Policy, Elsevier, vol. 119(3), pages 252-257.
    2. Galizzi, Matteo M. & Miraldo, Marisa, 2011. "The effects of hospitals' governance on optimal contracts: Bargaining vs. contracting," Journal of Health Economics, Elsevier, vol. 30(2), pages 408-424, March.
    3. repec:eee:hepoli:v:122:y:2018:i:2:p:75-80 is not listed on IDEAS

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