Long-term contracts in the NHS: a solution in search of a problem?
Purchasers and providers in the National Health Service (NHS) are now required to move from annual contracting cycles to longer-term contracts. The benefits are expected to include more efficient investment and improved sharing of financial risk. This paper argues that the economic analysis of longer-term contracts has assumed implicitly that agents operate in the private sector. Once the constraints of the public sector are introduced, the apparent economic benefits of longer-term contracts become doubtful. The paper explores these issues using evidence collected from analysis of the contracts of a sample of Health Authorities and from semi-structured interviews with individuals involved in the contracting process. We conclude that with the property rights and financial structure of the public sector, the move from short- to long-term contracts is unlikely to produce the improvements in performance expected by the government.
Dawson
D
D
Centre for Health Economics, University of York, York, UK.
Goddard
M
M
D003284:Contract Services / Q000191:economics*; D006801:Humans; D007407:Interviews as Topic; D012308:Risk Management; D013222:State Medicine / Q000458:organization & administration*; D013997:Time Factors; D006113:United Kingdom