Comparing NHS Hospital Unit Costs

Efforts to improve the efficiency of the hospital sector in the National Health Service (NHS) have concentrated on measuring the unit costs of service provision. Hospitals identified as having high unit costs are considered poor performers. Several indices have been constructed to measure unit costs. These produce conflicting messages: hospitals with relatively high unit costs as measured using one index may have low unit costs according to another index. Furthermore, the publication of cost information may lead to unintended consequences and perverse behaviour, rather than genuine performance improvements. To get a more accurate picture of performance, cost information should be included within a broader performance assessment framework for hospitals.     

Regulation and facilitation of public‐private partnerships: The MSP policy framework

This article describes the Municipal Services Partnership (MSP) Policy developed by the Department of Constitutional Development (DCD) of the Ministry for Provincial Affairs and Constitutional Development of South Africa to help local authorities respond to the great demand for improvement of municipal services. The MSP policy was developed by the DCD, utilising consultative policy making. It defines municipal services partnerships and typical contractual forms of MSPs, and also identifies gaps and constraints in existing South African law that can make implementation of MSPs unnecessarily difficult or more costly for local authorities and service consumers. The policy creates a framework for competitive procurement of MSP contracts and, finally, it describes the capacity needs of local authorities to deal effectively with MSP planning, procurement and implementation, and identifies new and expanded institutional roles at the local and national levels to support local authorities that wish to engage in MSPs     

Cost-Sharing Incentive Programs for Source Water Protection: The Grand River's Rural Water Quality Program

Over the last few years, Canadian provinces have come to see watershed-based source protection as a means of improving water quality that has been subject to upstream agricultural contamination. Cost-sharing incentive programs—whereby farmers are reimbursed for some portion of out-of-pocket expenses when they voluntarily adopt Best Management Practices—have been identified as possible means of achieving the goal. This paper uses data from the first seven years of operation of Ontario's Rural Water Quality Program for the Grand River to examine the role of financial incentives in encouraging participation. Program data supplemented with Statistics Canada's Census of Agriculture data are used to estimate a Heckman two-stage model of participation rates. Program-specific cost-sharing incentive factors, along with farm income and computer usage, are important determinants in the first-stage discrete participation decision. The most significant factor in the second-stage degree of participation decision is the maximum dollar value of grant that can be obtained by the farm; however, participation response elasticities are inelastic, ranging between 0.02 and 0.25. Au cours des dernières années, les provinces canadiennes en sont venues à considérer la protection des sources d’eau à l’échelle des bassins versants comme un moyen d’améliorer la qualité de l’eau susceptible d’être contaminée par les activités agricoles en amont. Les programmes d’incitatifs à frais partagés – dans le cadre desquels une partie des dépenses que les producteurs engagent leur sont remboursées lorsqu’ils adoptent volontairement de meilleures pratiques de gestion – sont perçus comme des moyens qui pourraient permettre d’atteindre l’objectif. Dans le présent article, nous avons utilisé les données des sept premières années d’application du Rural Water Quality Program, mis en place par l’Ontario pour la protection de la rivière Grand, afin d’examiner le rôle des incitatifs financiers dans l’encouragement à la participation. Nous avons utilisé les données de ce programme ainsi que des données tirées du Recensement de l’agriculture de Statistique Canada pour analyser les taux de participation à l’aide du modèle en deux étapes de Heckman. À la première étape, les incitatifs à frais partagés spécifiques à un programme, de même que le revenu agricole et l’utilisation d’un ordinateur, sont des facteurs importants dans le choix de participer ou non. À la deuxième étape, la valeur maximale de la subvention que peut obtenir une exploitation agricole représente le facteur le plus important. Toutefois, l’élasticité des réponses de participation est inélastique, et varie de 0,02 à 0,25.     

Do (Fe)Male Auditors Impair Audit Quality? Evidence from Going-Concern Opinions

Recent research indicates that there may be a relationship between the characteristics of the audit engagement partner and audit quality. In this paper, we examine the relationship between audit quality and the presence of a female or male audit engagement partner. We use the likelihood that an auditor issues a going-concern opinion (GCO), conditional on the client's financial situation, as an indicator of audit quality. Using a sample of 7105 financially distressed, private Belgian companies, we find that female auditors are, ceteris paribus, more likely to issue GCOs than male auditors. Our results also show that this effect is stronger when clients are either important (i.e. represent a material portion of the auditor's revenues) or high-risk (i.e. associated with increased uncertainties and risks). Collectively, these results indicate higher audit quality by female auditors.     

Institutional Herding in the ADR Market

This study examines institutional herding in the ADR market between 1985 and 1998. We find a significant positive relation between changes in institutional ownership and ADR returns over the same period. The positive relation persists after we control for the momentum effect in the US stock markets. We also find that in the ADR market, past winners (losers) in the herding period continue to be the winners (losers) in the post-herding period. The lack of a returns reversal suggests institutional herding is related to momentum trading. However, the positive relation between institutional ownership changes and ADR returns remains after controlling for momentum trading in the ADR market. Our results also rule out that positive feedback trading is related to institutional herding in the ADR market.     

Total system costs and the case of the executive's hernia

This article describes the advantages of taking a total system cost approach in the development of a benefits plan that improves employee health, productivity and profitability. It discusses the benefits and points out the possible pitfalls to the total system cost approach in providing employee health care. A research model is used to assess the value of certain medical procedures and technologies. To exemplify the point more clearly, the author uses a most interesting case study alluded to in the title of the article.     

CVM Embedding Effects When There Are Active, Potentially Active and Passive Users of Environmental Goods

Embedding is said to occur when thewillingness-to-pay (WTP) values for a gooddiffer according to whether the good is valuedon its own or as part of a package of goods. Itcan manifest itself as a question order orsequencing effect whereby the WTP for a gooddepends upon the order in which contingentvaluation questions are asked. Usingsplit-sample data from different questionorderings of a survey administered to a generalpopulation, the willingness-to-pay values forimprovements to three recreational activities(swimming, fishing, and boating in HamiltonHarbour, Ontario, Canada) are estimated. Respondents are divided into three types ofuser groups: active users, potentially activeusers, and passive users. The paper thenexamines the extent to which embedding in theform of different question sequences affectseach of these three user types. Severalarguments are put forward to suggest whypassive users might be more susceptible toquestion order than active users. The resultssupport the hypothesis that order effects arelikely to be larger for passive users and alsoshow that potentially active users may beaffected by question order to a greater extentthan active users. This highlights theimportance of considering context when usingmultiple-question CVM to value passive usegoods.     

Homo Economicus,AIs, humans and rats: decision-making and economic welfare

ABSTRACT

Critics of economics often highlight two related issues: the empirical falsity of the ‘homo economicus’ assumption of rational, self-interested maximisation; and the ethical consequences of models based on this assumption. Yet many experiments in biology show non-human creatures often seem to behave as if they were rational maximisers, suggesting that context rather than cognitive capacity is important for determining behaviour. The critique of rational choice poses a less serious methodological challenge to economics than is sometimes thought. However, economists do need to respond to the ethical critique that decisions and policies based on the assumption of rational self-interested maximisation change the norms of individual behaviour for the worse. This paper argues that economics has become divorced from ethics because for a century it has dealt only with ordinal, not cardinal, welfare rankings and has thus ruled out interpersonal comparisons. While enabling economists to separate normative from positive analysis, this separation protocol has left welfare economics both internally contradictory and unable to address major societal decisions, even though welfare economics is used constantly in limited ways, such as cost-benefit analysis. This separation reflects empirically inaccurate assumptions concerning preference formation and the conditions of supply and demand (but not the rational choice assumption) in the foundational welfare economic theorems. Economics must urgently revisit welfare economics, particularly in the context of modern economies in which individuals are increasingly interdependent, and the assumptions required for the fundamental welfare theorems therefore increasingly invalid.