[go: up one dir, main page]
IDEAS home Printed from https://ideas.repec.org/p/chy/respap/156chedp.html
   My bibliography  Save this paper

Contracting in the UK NHS: purpose, process and policy

Author

Listed:
  • Maria Goddard

    (Centre for Health Economics, The University of York)

  • Russell Mannion
  • Brian Ferguson
Abstract
Contracting has played a central role in the NHS reforms as the principal mechanism by which resources are transferred from purchasers to providers. The nature, process and role of contracting are traced by examining the development of government policy on this issue since the inception of the reforms. Much of the emphasis in the early years of the reforms was on getting the detail of contracting ‘right’, with attention becoming focused more recently on wider commissioning issues and the nature of the purchaser-provider relationship. The contracting environment is described and consideration is given to the way in which changes in this environment have influenced the role and nature of contracting, particularly in terms of the tension between the role of the market and the role of management in the NHS. Contracts have been used partly as a management tool and partly as a means to promote competition, often through the threat of competition (‘contestability’) rather than actually switching contracts between providers. The present government’s stated intention to abolish the internal market will lessen the role of contracts as a mechanism to promote competition, but within a “system of contestability to force improvements in standards” (Labour Party 1996). If contestability is to be used more radically in the NHS, a clearer separation may be required between the ownership and operation of assets to address issues of poor provider performance. Longer-term contracts (or agreements) then become the framework within which providers operate to meet purchaser service specifications, with an increasing emphasis on quality and effectiveness of services, and a decreasing emphasis on annual activity and price negotiations. The key challenge will lie in creating an appropriate set of incentives to reward efficient providers, and to ensure sufficient flexibility in longer-term agreements to challenge poor performance.

Suggested Citation

  • Maria Goddard & Russell Mannion & Brian Ferguson, 1997. "Contracting in the UK NHS: purpose, process and policy," Working Papers 156chedp, Centre for Health Economics, University of York.
    • Handle: RePEc:chy:respap:156chedp
    as

    Download full text from publisher

    File URL: http://www.york.ac.uk/media/che/documents/papers/discussionpapers/CHE%20Discussion%20Paper%20156.pdf
    File Function: First version, 1997
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Goldberg, Victor P & Erickson, John R, 1987. "Quantity and Price Adjustment in Long-term Contracts: A Case Study of Petroleum Coke," Journal of Law and Economics, University of Chicago Press, vol. 30(2), pages 369-398, October.
    2. Diane Dawson, 1994. "Costs and prices in the internal market: markets vs the NHS Management Executive Guidelines," Working Papers 115chedp, Centre for Health Economics, University of York.
    3. Joskow, Paul L, 1987. "Contract Duration and Relationship-Specific Investments: Empirical Evidence from Coal Markets," American Economic Review, American Economic Association, vol. 77(1), pages 168-185, March.
    4. Keith J. Crocker & Scott E. Masten, 1988. "Mitigating Contractual Hazards: Unilateral Options and Contract Length," RAND Journal of Economics, The RAND Corporation, vol. 19(3), pages 327-343, Autumn.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Mark Dusheiko & Maria Goddard & Hugh Gravelle & Rowena Jacobs, 2006. "Trends in health care commissioning in the English NHS: an empirical analysis," Working Papers 011cherp, Centre for Health Economics, University of York.
    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, March.
    3. Sonali Das & Ming‐Hui Chen & Nicholas Warren & Michael Hodgson, 2011. "Do associations between employee self‐reported organizational assessments and attitudinal outcomes change over time? An analysis of four Veterans Health Administration surveys using structural equatio," Health Economics, John Wiley & Sons, Ltd., vol. 20(12), pages 1507-1522, December.
    4. Propper, Carol & Sutton, Matt & Whitnall, Carolyn & Windmeijer, Frank, 2010. "Incentives and targets in hospital care: Evidence from a natural experiment," Journal of Public Economics, Elsevier, vol. 94(3-4), pages 318-335, April.
    5. Mark Dusheiko & Maria Goddard & Hugh Gravelle & Rowena Jacobs, 2008. "Explaining trends in concentration of healthcare commissioning in the English NHS," Health Economics, John Wiley & Sons, Ltd., vol. 17(8), pages 907-926, August.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Ciccotello, Conrad S & Hornyak, Martin J & Piwowar, Michael S, 2004. "Research and Development Alliances: Evidence from a Federal Contracts Repository," Journal of Law and Economics, University of Chicago Press, vol. 47(1), pages 123-166, April.
    2. Mayer, Kyle J. & Teece, David J., 2008. "Unpacking strategic alliances: The structure and purpose of alliance versus supplier relationships," Journal of Economic Behavior & Organization, Elsevier, vol. 66(1), pages 106-127, April.
    3. Wang, Sen & Bogle, Tim & van Kooten, G. Cornelis, 2012. "Forestry and the New Institutional Economics," Working Papers 130818, University of Victoria, Resource Economics and Policy.
    4. Sergei Guriev & Dmitriy Kvasov, 2005. "Contracting on Time," American Economic Review, American Economic Association, vol. 95(5), pages 1369-1385, December.
    5. Anjana Susarla & Ramanath Subramanyam & Prasanna Karhade, 2010. "Contractual Provisions to Mitigate Holdup: Evidence from Information Technology Outsourcing," Information Systems Research, INFORMS, vol. 21(1), pages 37-55, March.
    6. Maija Halonen-Akatwijuka & Oliver Hart, 2020. "Continuing Contracts [“Firms’ Use of Outside Contractors: Theory and Evidence,”]," The Journal of Law, Economics, and Organization, Oxford University Press, vol. 36(2), pages 284-313.
    7. M'Hand Farès & Stéphane Saussier, 2002. "Coûts de transaction et contrats incomplets," Revue Française d'Économie, Programme National Persée, vol. 16(3), pages 193-230.
    8. Nicholas S. Argyres & Janet Bercovitz & Kyle J. Mayer, 2007. "Complementarity and Evolution of Contractual Provisions: An Empirical Study of IT Services Contracts," Organization Science, INFORMS, vol. 18(1), pages 3-19, February.
    9. Dean V. Williamson, 2006. "Organization, Control and the Single Entity Defense in Antitrust," EAG Discussions Papers 200604, Department of Justice, Antitrust Division.
    10. Chi-Kong Chyong, 2015. "Markets and long-term contracts: The case of Russian gas supplies to Europe," Cambridge Working Papers in Economics 1542, Faculty of Economics, University of Cambridge.
    11. López-Bayón, Susana & González-Díaz, Manuel, 2010. "Indefinite contract duration: Evidence from electronics subcontracting," International Review of Law and Economics, Elsevier, vol. 30(2), pages 145-159, June.
    12. Gine,Xavier & Jacoby,Hanan G. & Gine,Xavier & Jacoby,Hanan G., 2016. "Markets, contracts, and uncertainty in a groundwater economy," Policy Research Working Paper Series 7694, The World Bank.
    13. Brodrechtova, Yvonne, 2015. "Economic valuation of long-term timber contracts: Empirical evidence from Germany," Forest Policy and Economics, Elsevier, vol. 55(C), pages 1-9.
    14. Maija Halonen-Akatwijuka & Oliver Hart, 2015. "Short-term, Long-term, and Continuing Contracts," NBER Working Papers 21005, National Bureau of Economic Research, Inc.
    15. Matthew Ellman, 2006. "The optimal length of contracts with application to outsourcing," Economics Working Papers 965, Department of Economics and Business, Universitat Pompeu Fabra.
    16. Ranjani Krishnan & Deepa Mani, 2020. "Uncertainty and Compensation Design in Strategic Interfirm Contracts†," Contemporary Accounting Research, John Wiley & Sons, vol. 37(1), pages 542-574, March.
    17. Hsuan-Yu Lin & Chih-Hai Yang, 2016. "Uncertainty, specific investment, and contract duration: evidence from the MLB player market," Empirical Economics, Springer, vol. 50(3), pages 1009-1028, May.
    18. David Martimort & Aggey Semenov & Lars Stole, 2017. "A Theory of Contracts with Limited Enforcement," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 84(2), pages 816-852.
    19. Temin, Peter & Maxwell, James, 2003. "Corporate contracting for health care," Journal of Economic Behavior & Organization, Elsevier, vol. 52(3), pages 403-420, November.
    20. Berry, David, 2002. "The market for tradable renewable energy credits," Ecological Economics, Elsevier, vol. 42(3), pages 369-379, September.

    More about this item

    Keywords

    NHS contracts;

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:chy:respap:156chedp. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Gill Forder (email available below). General contact details of provider: https://edirc.repec.org/data/chyoruk.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.