Choice of contracts for quality in health care: Evidence from the British NHS

E Fichera, Hugh Stanley Emrys Gravelle, M Pezzino , Matthew Sutton

Research output: Working paper


We examine how public sector third-party purchasers and hospitals negotiate quality targets when a fixed proportion of hospital revenue is required to be linked to quality. We develop a bargaining model linking the number of quality targets to purchaser and hospital characteristics. Using data extracted from 153 contracts for acute hospital services in England in 2010/11, we find that the number of quality targets is determined by the purchaser's population health and its budget, the
hospital type, whether the purchaser delegated negotiation to an agency, and the quality targets imposed by the supervising regional health authority.
Original languageEnglish
Place of PublicationYork, UK
PublisherCentre for Health Economics, University of York
Number of pages33
Publication statusPublished - Jun 2013

Publication series

NameCHE Research Paper
PublisherCentre for Health Economics, University of York

Bibliographical note

CHE Research Paper 85


  • Contracts
  • quality
  • financial incentives
  • pay for performance
  • hospitals
  • Nash bargaining

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