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The new NHS: financial incentives for quality?

Papanicolas, Irene (2011) The new NHS: financial incentives for quality? PhD thesis, The London School of Economics and Political Science (LSE).

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In April 2002, five years after the Blair government’s proposals to create a ‘New NHS [National Health Service]’, the government outlined the key priorities that would mark the NHS reform. The main reforms involved patient choice supported by a system of ‘Payment by Results’ (PbR) under which hospitals would be funded on the activity they undertook. PbR is a case based payment system, a type of system increasingly being adopted as the main form of provider payment across industrialised countries. The literature on this type of payment system and experiences from other countries identifies many di!erent behavioural incentives that can have both positive and negative impacts on quality of care. This thesis investigates the quality implications observed so far in England, for seven conditions which represent a spectrum of important clinical areas that are admitted through both emergency and elective admissions. In order to identify changes in quality, this thesis first considers how to construct an appropriate measure of quality. The first part of the thesis utilizes two di!erent methodological techniques used for quality measurement; a latent variable approach and a technique put forward by McClellan and Staiger (1999) using Vector Autoregressions. The results from these techniques indicate that quality measurement approaches di!er markedly with regards to how much measurement and systematic error they are able to filter out of raw outcome data. Finally, the new indicators created by these techniques are used to evaluate the quality impact the introduction of PbR as the main form of hospital payment has had in England. The analysis indicates that since the policy’s implementation, there have been di!erential quality e!ects on the di!erent conditions. However, for the most part this indicates an improvement in mortality outcomes, and a reduction in the variation of outcomes across hospitals. As found, the interpretation of readmissions has to be approached with caution as more severe patients being kept alive through quality improving measures on mortality create more mixed signals for the readmission indicators. In two conditions we find changes in activity that are indicative of e"ciency gains, in the form of better coding and adoption of new technology, both as a result of differences in reimbursement categories.

Item Type: Thesis (PhD)
Additional Information: © 2011 Irene Papanicolas
Library of Congress subject classification: R Medicine > RA Public aspects of medicine
Sets: Departments > Social Policy
Collections > LSE History of Thought theses
Supervisor: Mossialos, Elias and McGuire, Alistair

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