The focus on the research is labour markets in healthcare and the effect of the behaviour of key employees in these markets on the quality, quantity and distribution of health. The growing body of economic theory on motivation and incentives (for example, Besley and Ghatak 2005, Benabou and Tirole 2006, Delfgaauw and Dur 2010, Francois 2000) has proved important in helping us to understand the factors that affect the behaviour of public service suppliers. However, empirical tests of this literature remain relatively rare. The aim is to fill this gap.
The focus of my research is on the micro-foundations: the role of key agents in contributing to the persistent variability in productivity, the take-up of innovation, and the variability in quality within and between healthcare suppliers and the implications for users of healthcare. The issues addressed are important in any labour market in which human capital is central to production and where there are market failures which mean government intervention is important and society cares about critical outputs. The focus to date has been on the behaviour of two groups - senior clinicians and management - both of whom are central in the production of healthcare. Similar agents are found in all areas of public (and many private) services production, so our findings will have implications more generally for public service production.
The size of the healthcare sector in the economy; the importance of the output to social wellbeing, the ability to exploit policy changes to create ‘natural’ experiments and the availability of large administrative datasets makes healthcare an ideal test-bed. Healthcare accounts for at least 10% of GDP in almost all OECD countries and this proportion is steadily rising. Thus understanding how healthcare production can be improved is key to social welfare and, because healthcare is often paid for by the public purse, to the fiscal position of the government.
The research has shown the importance of non-financial incentives in driving the behaviour of healthcare suppliers and users. It has shown that in the case of adoption of new technology, and in established practices, providers respond to the behaviour of their peers, their work networks and to new information that is available to all. For consumers of healthcare, it has shown that access to information via the internet changes behaviour, that common information through the internet has different impacts on different individuals, and that responses to such information is not always beneficial for the healthcare system or for individual health. It has also shown that public policy changes that mimic private sector corporate governance do not translate well into public hospitals in the UK.
