The impact of incentives for competition and co-operation on the behaviour of health care organisations: a case study of the planning and provision of diabetes services in the English NHS.

Abstract

This thesis explores the co-ordination of public services through an examination of the way organisations in the English NHS negotiate incentives for competition and co-operation to deliver co-ordinated care to diabetic patients. Whilst the bodies responsible for the planning and provision of local services in the English NHS need to co-operate to ensure the co-ordination of services across organisational boundaries, they are also subject to a wide range of system reform mechanisms which encourage competition between the providers of services. The tension between these incentives raises questions about how organisations and professionals understand their objectives in this environment, and how this understanding translates into the relationships between organisations as they work together to plan and provide co-ordinated services. Both the wider institutional context affecting competition and co-operation in the NHS, and commissioner and provider behaviour in the local context are examined. This examination is conducted in the light of the hierarchy, market and network modes of co-ordination. The research examines the applicability of the theories of ‘co-opetition’ and Ostrom’s Institutional Analysis and Development framework as analytic frameworks to help understand the behaviour of NHS organisations and professionals as they work together to provide co-ordinated services. Theories of behaviour from game theory, economics, economic sociology and organisational studies are also explored to identify the rules of behaviour which organisations and professionals follow. The review of the decisions of national regulatory bodies suggested that the promotion of competition was secondary to other concerns, although this position appeared to be changing following the implementation of the Health and Social Care Act 2012. Whilst co-opetition and Ostrom’s IAD framework are concerned with how incentives for competition and co-operation can co-exist and can be managed for the benefit of all, at a local level the impact of incentives for both competition and co-operation on the behaviour of organisations and professionals was blunted by the predominance of hierarchical modes of co-ordination. Local context was found to be important in shaping the deployment of incentives for competition and co-operation, and establishing the rules of behaviour. Where organisations and professionals were exposed to incentives for both competition and co-operation, the delivery of services did not appear to be unduly affected, but lack of trust inhibited the sharing of sensitive information between parties, and reduced the quality of interactions in relation to other activities. It is suggested that the development of network relationships within the NHS hierarchy should be encouraged in order to realise the benefits which can be gained from close co-operative working relationships between organisations.