Siciliani, Luigi orcid.org/0000-0003-1739-7289, Gaughan, James Michael orcid.org/0000-0002-8409-140X, Gutacker, Nils orcid.org/0000-0002-2833-0621 et al. (2 more authors) (2021) Paying for health gains. Discussion Paper. CHE Research Paper . Centre for Health Economics, University of York , York, UK.
Abstract
Payments to healthcare providers are often based on the number of patients they treat according to their particular health condition with well-known limitations. Payment based on health outcomes, a form of pay-for-performance, has long been advocated as a possible solution. This study adopts a contract theory approach and illustrates how it can inform practical implementation of pay-for-performance schemes that reward health outcomes. We first provide a simple but general model on the design of an incentive scheme that rewards providers for improved health, as a function of key parameters related to patient health benefits and provider costs. We then calibrate the model using data from two elective procedures, hip and knee replacement, using patient reported outcome measures. The pricing rule suggests that the bonus should be set to reflect the difference between the provider’s marginal cost of a health improvement before the policy intervention and the provider’s marginal cost evaluated at the target health set by the purchaser. We provide estimates of the optimal bonus for hip and knee replacement under a range of assumptions about provider cost functions and the value of health improvements.
Metadata
Item Type: | Monograph |
---|---|
Authors/Creators: |
|
Keywords: | : hospitals,pay for performance,quality,health |
Dates: |
|
Institution: | The University of York |
Academic Units: | The University of York > Faculty of Social Sciences (York) > Economics and Related Studies (York) The University of York > Faculty of Social Sciences (York) > Centre for Health Economics (York) The University of York > Faculty of Social Sciences (York) > Centre for Health Economics (York) > CHE Research Papers (York) |
Depositing User: | Pure (York) |
Date Deposited: | 07 Jul 2021 14:00 |
Last Modified: | 21 Jan 2025 18:31 |
Status: | Published |
Publisher: | Centre for Health Economics, University of York |
Series Name: | CHE Research Paper |
Related URLs: | |
Open Archives Initiative ID (OAI ID): | oai:eprints.whiterose.ac.uk:175995 |
Download
Filename: CHERP183_Paying_Health_Gains.pdf
Description: CHERP183_Paying_Health_Gains