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Costing and competition.

K Bates1, S Brignall

  • 1Warwick University Business School.

Health Services Management
|June 7, 1994
PubMed
Summary
This summary is machine-generated.

A new healthcare contract system bases prices on full costs, driving efficiency through competition. Providers also compete on non-price factors like quality and innovation.

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Area of Science:

  • Health economics
  • Healthcare management

Background:

  • The "Working for Patients" reforms introduced a new healthcare contracting system.
  • This system shifted to full cost-based pricing, aiming to eliminate cross-subsidization between healthcare services.

Purpose of the Study:

  • To analyze the economic implications of the new healthcare contracting system.
  • To examine the role of cost-based pricing and competition in healthcare service provision.

Main Methods:

  • Analysis of the "Working for Patients" reforms and their impact on healthcare contracts.
  • Economic evaluation of cost-based pricing mechanisms in the healthcare sector.

Main Results:

  • The new system necessitates enhanced costing systems for providers.

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  • Price competition is a key outcome, intended to improve service efficiency.
  • Non-price competition, including differentiation on quality, flexibility, and innovation, also emerged.

    • Conclusions:

    • The "Working for Patients" reforms established a competitive healthcare market.
    • Improved costing systems and competition (both price and non-price) are crucial for healthcare efficiency.