Chapter

Health Care

Julian Le Grand

in Motivation, Agency, and Public Policy

Published in print September 2003 | ISBN: 9780199266999
Published online April 2004 | e-ISBN: 9780191600869 | DOI: http://dx.doi.org/10.1093/0199266999.003.0007
Health Care

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Examines the development of robust incentive structures in health care, using two examples from British health care: the holding of budgets for hospital care by organisations of primary‐care physicians (General Practitioner practices and, more recently, Primary Care Trusts), and the payment of hospital specialists or consultants. It concludes that it is possible to design policies that offer robust incentives to medical professionals, that empower patients, but that avoid the problems of unfettered patient choice. Devices such as allowing budget‐holding professionals to keep surpluses on their budget, providing those surpluses are spent in a way that improves patient care, or paying professionals fee‐for‐service at a rate that incorporates some sacrifice compared with alternatives, help align knightly and knavish motivations.

Keywords: budget‐holding; consultants; General Practitioners; GP fund‐holding; incentives; payment of hospital specialists; PCTs; Primary Care Trusts

Chapter.  5810 words. 

Subjects: Public Economics

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