Conflicting Financial Incentives in the Irish Health-Care System

June 29, 2012

The Economic and Social Review, Vol. 43, No. 2, Summer 2012, pp. 273-301

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In health care, there is extensive empirical evidence that the behaviour of both providers and users is affected by the financial incentives that they face. In this paper, we adopt a systemwide perspective and develop a conceptual framework to examine how current financial incentives in Irish health care conflict along four dimensions: provider versus user, user across type of provider, provider versus provider, and provider across type of user. We highlight areas within each of these four dimensions where current financial incentive structures are incompatible with existing policy priorities. The analysis in the paper also provides a framework to assess the effects of proposed policy changes on financial incentives within the health-care system using a joint analytic approach.