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Contracting for Health Services with Unmonitored Quality

Contracting for Health Services with Unmonitored Quality Abstract In both the NHS and Medicare, recent emphasis has been on contracts with payment based only on the number of patients treated. It is shown that, without direct monitoring of quality or effort to reduce costs, such contracts are efficient only when it is efficient to treat all patients wanting treatment. It may not be when treatment costs are insured or subsidised. Such contracts can then be improved by including payments for the number of patients wanting treatment, as well as for the number actually treated. Even then, the outcome will not generally be efficient if quality is multi‐dimensional. This content is only available as a PDF. Author notes We would like to thank participants in the `Industrial Organization of Health Care' conference held at Boston University, September, 1995, and two anonymous referees for helpful comments. The support of the Economic and Social Research Council (ESRC) is gratefully acknowledged. The work was part of the ESRC Contracts and Competition Research Programme and was funded by ESRC award number L114251005. © Royal Economic Society 1998 http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png The Economic Journal Oxford University Press

Contracting for Health Services with Unmonitored Quality

The Economic Journal , Volume 108 (449) – Jul 1, 1998

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References (14)

Publisher
Oxford University Press
Copyright
© Royal Economic Society 1998
ISSN
0013-0133
eISSN
1468-0297
DOI
10.1111/1468-0297.00331
Publisher site
See Article on Publisher Site

Abstract

Abstract In both the NHS and Medicare, recent emphasis has been on contracts with payment based only on the number of patients treated. It is shown that, without direct monitoring of quality or effort to reduce costs, such contracts are efficient only when it is efficient to treat all patients wanting treatment. It may not be when treatment costs are insured or subsidised. Such contracts can then be improved by including payments for the number of patients wanting treatment, as well as for the number actually treated. Even then, the outcome will not generally be efficient if quality is multi‐dimensional. This content is only available as a PDF. Author notes We would like to thank participants in the `Industrial Organization of Health Care' conference held at Boston University, September, 1995, and two anonymous referees for helpful comments. The support of the Economic and Social Research Council (ESRC) is gratefully acknowledged. The work was part of the ESRC Contracts and Competition Research Programme and was funded by ESRC award number L114251005. © Royal Economic Society 1998

Journal

The Economic JournalOxford University Press

Published: Jul 1, 1998

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