PubMed · 17042460
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Joseph Rubas, Wendy L Rubas. 2006. Constructing a building contract.. https://pubmed.ncbi.nlm.nih.gov/17042460/
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The English National Health Service has replaced locally negotiated block contracting arrangements with a system of national prices to pay for hospital activity. This paper applies a transaction costs approach to quantify and analyse the nature of how contracting costs have changed as a consequence. Data collection was based on semi-structured interviews with key stakeholders from hospitals and Primary Care Trusts, which purchase hospital services. Replacing block contracting with activity based funding has led to lower costs of price negotiation, but these are outweighed by higher costs associated with volume control, of data collection, contract monitoring, and contract enforcement. There was consensus that the new contractual arrangements were preferable, but the benefits will have to be demonstrated formally in future.
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BACKGROUND: Pay for performance has increasingly become the subject of intense interest and debate, both of which have been heightened as the Centers for Medicare and Medicaid Services moves closer to adopting this approach for Medicare. Although many claims have been made for the effectiveness of this approach, the extent of its national penetration remains unknown. METHODS: We surveyed a sample of 252 health maintenance organizations (HMOs) (response rate, 96%) drawn from 41 metropolitan areas across the nation about use of pay for performance. We determined the prevalence of pay-for-performance programs, detailed the features of such programs, and examined the adoption of pay for performance as a function of the characteristics of both the health plans and markets. RESULTS: More than half the HMOs, representing more than 80% of persons enrolled, use pay for performance in their provider contracts. Of the 126 health plans with pay-for-performance programs, nearly 90% had programs for physicians and 38% had programs for hospitals. Use of pay for performance was statistically associated with geographic region, use of primary care providers (PCPs) as gatekeepers, use of capitation to pay PCPs, and whether the plans themselves received bonuses or penalties according to performance. CONCLUSIONS: Pay for performance is now commonly used by HMOs, especially those that are situated to assign responsibility for a particular patient to a PCP or medical group. As the design of Medicare with pay for performance moves forward, it will be important to leverage the early experience of pay for performance in the commercial market.