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Who to pay for performance? The choice of organisational level for hospital performance incentives

Author

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  • Kristensen, Soren Rud

    () (Centre of Health Economics, University of Manchester)

  • Bech, Mickael

    () (COHERE, Department of Business and Economics, University of Southern Denmark)

  • Lauridsen, Jørgen T

    () (COHERE, Department of Business and Economics, University of Southern Denmark)

Abstract

When implementing a pay for performance (P4P) scheme, designers must decide to whom the nancial incentive for performance should be directed. This paper compares department level hospital reported performance on the Danish Case Management Scheme at hospitals that did and did not redistribute performance payments to the department level. Across a range of models we nd that hospital reported performance at departments that operate under a direct nancial incentive is about 5 percentage points higher than performance at departments at hospital where performance payments are not directly redistributed to the department level. This result is in line with the theoretical expectations but due to the non-experimental design of the study, our results only have a causal interpretation under certain assumptions discussed in the paper

Suggested Citation

  • Kristensen, Soren Rud & Bech, Mickael & Lauridsen, Jørgen T, 2013. "Who to pay for performance? The choice of organisational level for hospital performance incentives," COHERE Working Paper 2013:5, University of Southern Denmark, COHERE - Centre of Health Economics Research.
  • Handle: RePEc:hhs:sduhec:2013_005
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    References listed on IDEAS

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    Blog mentions

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    1. #HEJC papers for August 2013
      by academichealtheconomists in The Academic Health Economists' Blog on 2013-08-01 04:00:48

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    Cited by:

    1. Ammi, Mehdi & Fortier, Grant, 2017. "The influence of welfare systems on pay-for-performance programs for general practitioners: A critical review," Social Science & Medicine, Elsevier, vol. 178(C), pages 157-166.

    More about this item

    Keywords

    Pay for performance; P4P; Hospital incentives; Incentive design; Team production;

    JEL classification:

    • L23 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Organization of Production
    • M52 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Personnel Economics - - - Compensation and Compensation Methods and Their Effects
    • O18 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Urban, Rural, Regional, and Transportation Analysis; Housing; Infrastructure

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