The Devil in the Details: Some Conclusions about How Funding Changes Translate into Financial Incentives in the Canadian Health System

Mita Giacomini (), J Lomas, Jeremiah Hurley, V Bhatia and L Goldsmith
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Mita Giacomini: Department of Clinical Epidemiology & Biostatistics, Centre for Health Economics and Policy Analysis, McMaster University
J Lomas: Department of Clinical Epidemiology & Biostatistics, Department of Geography, Centre for Health Economics and Policy Analysis, McMaster University, Canadian Institute for Advanced Research
V Bhatia: Centre for Health Economics and Policy Analysis, McMaster University
L Goldsmith: Department of Clinical Epidemiology & Biostatistics, Centre for Health Economics and Policy Analysis, McMaster University

No 1996-14, Centre for Health Economics and Policy Analysis Working Paper Series from Centre for Health Economics and Policy Analysis (CHEPA), McMaster University, Hamilton, Canada

Abstract: Every funding system creates “incentives.” However, in real policy applications, the motivating quality of a funding change is not inherent to the funding structure. Rather, contextual factors highly determine how organizations and individuals interpret, feel motivated by, and act in response to funding arrangements. Important contextual factors include relationships between and within affected organizations, social role expectations, regulations, and structures such as information and institutions. This paper surveys the findings of seven case studies that explored how stakeholders interpreted and responded to various funding reforms. Funding structures can be interpreted to alter relationships, to herald good or bad fortune, to carry, hide, or drop policy mandates, or to create enabling or disabling structures. We conclude that the incentives created by funding arrangements may be necessary to support health care reforms, but are unlikely ever to be sufficient to carry reforms through in the absence of similar-spirited regulations, information, and institutional arrangements.

Pages: 30 pages
Date: 1996
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