Contracts and supply assurance in the UK health care market.
We present a formal model of the relationship between a health care purchaser and a provider drawing on the recent experience of explicit contracting in the UK health sector. Specifically we model the contractual relationships emerging between District Health Authorities, who are presently the dominant health care purchasers, and the providers of hospital care. The comparative static analysis implies that the transaction cost of using non-local hospitals, the expected patient demand, the extent of excess capacity in local hospitals, and the proportion of that excess capacity expected to be lost to competitive purchasers, are all important determinants of the choice of contract.
Fenn
P
P
School of Management and Finance, Nottingham University, UK.
Rickman
N
N
McGuire
A
A
D002391:Catchment Area, Health / Q000191:economics; D003284:Contract Services / Q000191:economics*; D005377:Financial Management, Hospital / Q000191:economics; D006282:Health Personnel / Q000191:economics; D006301:Health Services Needs and Demand / Q000191:economics*; D006742:Hospital Bed Capacity / Q000191:economics; D006801:Humans; D008389:Marketing of Health Services / Q000191:economics*; D018803:Models, Economic; D011682:Purchasing, Hospital / Q000191:economics; D012040:Regional Health Planning / Q000458:organization & administration*; D013222:State Medicine / Q000191:economics / Q000458:organization & administration*; D006113:United Kingdom