Long‐term contracts in the NHS: a solution in search of a problem?

Diane Dawson and Maria Goddard

Health Economics, 1999, vol. 8, issue 8, 709-720

Abstract: 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. Copyright © 1999 John Wiley & Sons, Ltd.

Date: 1999
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Citations: View citations in EconPapers (5)

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https://doi.org/10.1002/(SICI)1099-1050(199912)8:83.0.CO;2-0

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Persistent link: https://EconPapers.repec.org/RePEc:wly:hlthec:v:8:y:1999:i:8:p:709-720

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