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6 - Commissioning of Healthcare Through Competitive and Cooperative Mechanisms Under the HSCA 2012
- Edited by Pauline Allen, University of Manchester, Kath Checkland, Valerie Moran, University of Kent, Canterbury, Stephen Peckham, Canterbury Christ Church University, Kent
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- Book:
- Commissioning Healthcare in England
- Published by:
- Bristol University Press
- Published online:
- 03 March 2021
- Print publication:
- 25 March 2020, pp 83-102
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Summary
Introduction
Competition and cooperation are the two fundamental mechanisms of service procurement in the NHS and represent the tools for ‘getting things done’. This chapter presents empirical findings from a longitudinal, qualitative case study research project into the use of competition and cooperation by local NHS commissioners following the HSCA 2012.
As outlined in Chapter 2, the economics of markets (and their opposite, hierarchies) in conjunction with more sophisticated theories of cooperation underpin the analysis of competition and cooperation in the NHS quasi-market. For a market to operate competitively, there needs to be sufficient numbers of buyers and sellers of goods and services. A key assumption is that purchasers have sufficient information about the goods or services to make rational choices and maximise their utility. The market will produce value for money by allocating resources to the best use at the most efficient price (Allen, 2013).
Competition in the NHS is realised through several models. Competition for the market is a result of tendering processes whereby different providers compete to deliver a particular service and one provider wins the whole market. Competition within the market exists when a number of providers are accredited to provide a particular service and they compete to attract patients. An example of the competition for the market is tendering out of community health services, and an example of competition within the market is the patient choice of elective secondary or community-based care.
In order to analyse cooperation the theory of ‘co-opetition’ and the work of Elinor Ostrom (2005) are utilised. Co-opetition suggests that organisations can compete and cooperate simultaneously to mutual benefit (Brandenburger and Nalebuff, 1996). Ostrom suggests that individuals can self-organise to solve collective problems, without direct control by the government, and can establish and enforce rules limiting the appropriation of common pool resources.
In terms of defining cooperation, there are a number of closely related terms such as collaboration, coordination, integrated care, networking and partnership. Integrated care implies the coordination of separate but interconnected components which should function together to perform a shared task (Kodner and Spreeuwenberg, 2002).
7 - Healthcare Contracts and the Allocation of Financial Risk
- Edited by Pauline Allen, University of Manchester, Kath Checkland, Valerie Moran, University of Kent, Canterbury, Stephen Peckham, Canterbury Christ Church University, Kent
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- Book:
- Commissioning Healthcare in England
- Published by:
- Bristol University Press
- Published online:
- 03 March 2021
- Print publication:
- 25 March 2020, pp 103-122
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Summary
Introduction
Contracts, which were introduced into the English NHS in the early 1990s, are the crux of the internal market. As in all markets, the negotiation and implementation of contracts for healthcare allow purchasers and providers to exchange information, and provide a framework for the allocation of financial risk. Financial risk, here defined as uncertainty of outcome, is allocated between purchasers and providers to reconcile their potentially conflicting objectives. Effective risk allocation occurs when risk is allocated to those who can control it, thereby incentivising those with responsibility for the risk to act to mitigate it. The contractual financial levers of pricing and payment structures play a key role in the allocation of financial risk between buyers and sellers. In the NHS, pricing and payment structures can allocate financial risk between those commissioning and providing services in order to incentivise demand management, improve efficiency, and, through the use of risk-sharing arrangements, encourage providers to work collectively.
This chapter examines two studies of NHS contracting conducted by PRUComm which examine how pricing and payment structures in NHS contracts allocate financial risk. As outlined in Chapter 1, institutional economics and socio-legal concepts underlie the study's approach to understanding the use of contracts in the NHS quasi-market. Contracting for health is challenging because of the complexity of health services and concomitant high levels of asymmetric information and uncertainty between providers of care and its purchasers (Arrow, 1963). Opportunism may occur as a result of this ‘information impactedness’ (Williamson, 1975), and one party may take advantage of the other's information deficit. Higher levels of asymmetric information will result in higher costs of negotiating and writing contracts, as well as monitoring, enforcing and renegotiating them. The purchaser can use the mechanisms of the contract, such as pricing and payment structures, to encourage the provider to deliver the outcomes desired by the purchaser, and to try to overcome the problems caused by imperfect information. Relational norms of contracts allow adjustments to be made to the initially agreed terms during the course of the contractual relationship to deal with unforeseen contingencies (Vincent-Jones, 2006).
Primary care-led commissioning and public involvement in the English National Health Service. Lessons from the past
- Christina Petsoulas, Stephen Peckham, Jane Smiddy, Patricia Wilson
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- Journal:
- Primary Health Care Research & Development / Volume 16 / Issue 3 / May 2015
- Published online by Cambridge University Press:
- 18 December 2014, pp. 289-303
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Background
Patient and Public involvement (PPI) in health care occupies a central place in Western democracies. In England, this theme has been continuously prominent since the introduction of market reforms in the early 1990s. The health care reforms implemented by the current Coalition Government are making primary care practitioners the main commissioners of health care services in the National Health Service, and a duty is placed on them to involve the public in commissioning decisions and strategies. Since implementation of PPI initiatives in primary care commissioning is not new, we asked how likely it is that the new reforms will make a difference. We scanned the main literature related to primary care-led commissioning and found little evidence of effective PPI thus far. We suggest that unless the scope and intended objectives of PPI are clarified and appropriate resources are devoted to it, PPI will continue to remain empty rhetoric and box ticking.
AimTo examine the effect of previous PPI initiatives on health care commissioning and draw lessons for future development.
MethodWe scanned the literature reporting on previous PPI initiatives in primary care-led commissioning since the introduction of the internal market in 1991. In particular, we looked for specific contexts, methods and outcomes of such initiatives.
Findings1. PPI in commissioning has been constantly encouraged by policy makers in England. 2. Research shows limited evidence of effective methods and outcomes so far. 3. Constant reconfiguration of health care structures has had a negative impact on PPI. 4. The new structures look hardly better poised to bring about effective public and patient involvement.