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Choice of Contracts in the British National Health Service: An Empirical Study

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  • Martin Chalkley
  • Duncan McVicar

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.

Suggested Citation

  • Martin Chalkley & Duncan McVicar, 2007. "Choice of Contracts in the British National Health Service: An Empirical Study," Dundee Discussion Papers in Economics 216, Economic Studies, University of Dundee.
    • Handle: RePEc:dun:dpaper:216
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    Cited by:

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    2. Eleonora Fichera & Hugh Gravelle & Mario Pezzino & Matt Sutton, 2013. "Choice of contracts for quality in health care: Evidence from the British NHS," Working Papers 085cherp, Centre for Health Economics, University of York.
    3. Mielczarek, Bożena, 2014. "Simulation modelling for contracting hospital emergency services at the regional level," European Journal of Operational Research, Elsevier, vol. 235(1), pages 287-299.
    4. Eleonora Fichera & Hugh Gravelle & Mario Pezzino & Matt Sutton, 2012. "Specification of financial incentives for quality in health care contracts," Economics Discussion Paper Series 1218, Economics, The University of Manchester.
    5. Petsoulas, Christina & Allen, Pauline & Hughes, David & Vincent-Jones, Peter & Roberts, Jennifer, 2011. "The use of standard contracts in the English National Health Service: A case study analysis," Social Science & Medicine, Elsevier, vol. 73(2), pages 185-192, July.
    6. Hong il Yoo, 2012. "A new condition for pooling states in multinomial logit," Discussion Papers 2012-48, School of Economics, The University of New South Wales.

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    More about this item

    Keywords

    health services; British NHS; physician agency; financial incentives;
    All these keywords.

    JEL classification:

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

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