title: Contracts and purchaser-provider relationships in community care.
abstract: This paper considers the incentives embodied in contracts between purchasers and providers of residential care for frail elderly people. The paper begins with an assessment of current contractual arrangements. A theoretical inquiry generates propositions that some contracts create incentives for providers to misrepresent users' characteristics. These propositions are found to be supported by sample data. The paper then turns to a theoretical consideration of optimal governance structures and, in particular, the use of incentive contracts. These contracts, it is claimed, may go some way to curbing cost-exaggerating behaviour without providing strong incentives to cream-skim or shirk on quality.
authors.affiliation: London School of Economics and Political Science, London, UK.
authors.forename: J
authors.initials: J
authors.lastname: Forder
mesh_terms: D000368:Aged; D003153:Community Health Services / Q000191:economics / Q000458:organization & administration* / Q000706:statistics & numerical data; D003284:Contract Services / Q000191:economics / Q000458:organization & administration*; D016330:Frail Elderly; D019981:Health Care Sector / Q000706:statistics & numerical data; D006302:Health Services Research / Q000379:methods; D006707:Homes for the Aged / Q000191:economics / Q000458:organization & administration* / Q000706:statistics & numerical data; D006801:Humans; D015233:Models, Statistical; D018579:Patient Selection; D011907:Rate Setting and Review; D012052:Reimbursement, Incentive; D013222:State Medicine; D006113:United Kingdom