Cost-based pricing in the NHS internal market : accounting choices and the achievement of economic efficiency

Since 1988, quasi-markets have been introduced into many areas of social policy in the UK, the NHS internal market is one example. Markets operate by price signals. The NHS Internal Market, if it is to operate efficiently, requires purchasers and providers to respond to price signals. The research hypothesis is - cost accounting methods can be developed to enable healthcare contracts to be priced on a cost-basis in a manner which will facilitate the achievement of economic efficiency in the NHS internal market. Surveys of hospitals in 1991 and 1994 established the cost methods adopted in deriving the prices for healthcare contracts in the first year of the market and three years on. An in-depth view of the costing for pricing process was gained through case studies. Hospitals had inadequate cost information on which to price healthcare contracts at the inception of the internal market: prices did not reflect the relative performance of healthcare providers sufficiently closely to enable the market's espoused efficiency aims to be achieved. Price variations were often due to differing costing approaches rather than efficiency. Furthermore, price comparisons were often meaningless because of inadequate definition of the services (products). In April 1993, the NHS Executive issued guidance on costing for contracting to all NHS providers in an attempt to improve the validity of price comparisons between alternative providers. The case studies and the 1994 survey show that although price comparison has improved, considerable problems remain. Consistency is not assured, and the problem of adequate product definition is still to be solved. Moreover, the case studies clearly highlight the mismatch of rigid, full-cost pricing rules with both the financial management considerations at local level and the emerging internal market(s). Incentives exist to cost-shift, and healthcare prices can easily be manipulated. In the search for a new health policy paradigm to replace traditional bureaucratic provision, cost-based pricing cannot be used to ensure a more efficient allocation of healthcare resources.

State control and corporate governance in transition economies:25 years on from 1989

Research Question/Issue - Which forms of state control over corporations have emerged in countries that made a transition from centrally-planned to marked-based economies and what are their implications for corporate governance? We assess the literature on variation and evolution of state control in transition economies, focusing on corporate governance of state-controlled firms. We highlight emerging trends and identify future research avenues. Research Findings/Insights - Based on our analysis of more than 100 articles in leading management, finance, and economics journals since 1989, we demonstrate how research on state control evolved from a polarized approach of public–private equity ownership comparison to studying a variety of constellations of state capitalism. Theoretical/Academic Implications - We identify theoretical perspectives that help us better understand benefits and costs associated with various forms of state control over firms. We encourage future studies to examine how context-specific factors determine the effect of state control on corporate governance. Practitioner/Policy Implications - Investors and policymakers should consider under which conditions investing in state-affiliated firms generates superior returns.

Exploring business models to provide a foundation for enhanced eye care services in high street optometric practice

High street optometric practices are for-profit businesses. They mostly provide sight testing and eye examination services and sell optical products, such as spectacles and contact lenses. The sight testing services are often sold at a vastly reduced price and profits are generated primarily through high margin spectacle sales, in a loss leading strategy. Published literature highlights weaknesses in this strategy as it forms a barrier to widening the scope of services provided within optometric practices. This includes specialist non-refraction based services, such as shared care. In addition this business strategy discourages investment in advanced diagnostic equipment and higher professional qualifications. The aim of this thesis was to develop a greater understanding of the traditional loss-leading strategy. The thesis also aimed to assess the plausibility of alternative business models to support the development of specialist non-refraction services within high street optometric practice. This research was based on a single independent optometric practice that specialises in advanced retinal imaging and offers a broad range of shared care services. Specialist non-refraction based services were found to be poor generators of spectacle sales likely due to patient needs and presenting concerns. Alternative business strategies to support these services included charging more realistic professional fees via cost-based pricing and monthly payment plans. These strategies enabled specialist services to be more self-sustainable with less reliance on cross-subsidy from spectacle sales. Furthermore, improving operational efficiency can increase stand-alone profits for specialist services.Practice managers may be reluctant to increase professional fees due to market pressures and confidence. However, this thesis found that patients were accepting of increased professional fees. Practice managers can implement alternative business models to enhance eye care provision in high street optometric practices. These alternative business models also improve revenues and profits generated via clinical services and improve patient loyalty.

Dispensing activity in a community pharmacy-based repeat dispensing pilot project

Objective: To measure changes in dispensing activity in a UK repeat dispensing pilot study and to estimate any associated cost savings. Method: Patients were provided with two successive three-monthly repeat prescriptions containing all of the items on their "repeat medicines list" and valid at a study pharmacy. Pharmacists consulted with patients at the time of supply and completed a patient-monitoring form. Prescriptions with pricing data were returned by the UK Prescription Pricing Authority. These data were used to calculate dispensing activity, the cost of dispensed items and an estimate of cost savings on non-dispensed items. A retrospective identification of items prescribed during the six months prior to the project was used to provide a comparison with those dispensed during the project and thus a more realistic estimate of changes. Setting: 350 patients from two medical practices in a large English City, with inner city and suburban locations, and served by seven pharmacies. Key findings: There were methodological challenges in establishing a robust framework for calculating changes. Based on all of the items that patients could have obtained from their repeat list, 23.8% were not dispensed during the intervention period. A correction was then made to allow for a comparison with usage in the six months prior to the study. Based on the corrected data, there was an estimated 11.3% savings in drug costs compared with the pre-intervention period. There was a marked difference in changes between the two practices, the pharmacies and individual patients. The capitation-based remuneration method was acceptable to all but one of the community pharmacists. Conclusion: The repeat dispensing system reduced dispensing volume in comparison with the control period. A repeat dispensing system with a focus on patients' needs and their use of medicines might be cost neutral.

Optimising market share and profit margin:SMDP-based tariff pricing under the smart grid paradigm

Smart grid technologies have given rise to a liberalised and decentralised electricity market, enabling energy providers and retailers to have a better understanding of the demand side and its response to pricing signals. This paper puts forward a reinforcement-learning-powered tool aiding an electricity retailer to define the tariff prices it offers, in a bid to optimise its retail strategy. In a competitive market, an energy retailer aims to simultaneously increase the number of contracted customers and its profit margin. We have abstracted the problem of deciding on a tariff price as faced by a retailer, as a semi-Markov decision problem (SMDP). A hierarchical reinforcement learning approach, MaxQ value function decomposition, is applied to solve the SMDP through interactions with the market. To evaluate our trading strategy, we developed a retailer agent (termed AstonTAC) that uses the proposed SMDP framework to act in an open multi-agent simulation environment, the Power Trading Agent Competition (Power TAC). An evaluation and analysis of the 2013 Power TAC finals show that AstonTAC successfully selects sell prices that attract as many customers as necessary to maximise the profit margin. Moreover, during the competition, AstonTAC was the only retailer agent performing well across all retail market settings.

Faces of pricing and profit planning at the doorstep of the EU: government pricing policy in the innovative pharmaceutical sector in Turkey

The majority of research on the pharmaceutical sector has focused on an overall micro economic, medical oriented welfare issues, whereas the marketing management role of the innovative drug manufacturer has to a large extent been disregarded. Using the case of Turkey, through a series of in-depth interviews with highly innovative companies, other marketing management possibilities to develop pricing strategies and plan for profit are explored based on broader definitions of value and transparency. Our results suggest that pharmaceutical companies as well as governments might have a too narrow focus of value and underestimate the potential long term benefits of a broader approach to marketing management and long term relationships between the various stakeholders.

Subunit vaccines distearoylphosphatidylcholine-based liposomes entrapping antigen offer a neutral alternative to dimethyldioctadecylammonium-based cationic liposomes as an adjuvant delivery system

The adjuvanticity of liposomes can be directed through formulation to develop a safe yet potent vaccine candidate. With the addition of the cationic lipid dimethyldioctadecylammonium bromide (DDA) to stable neutral distearoylphosphatidylcholine (DSPC):cholesterol (Chol) liposomes, vesicle size reduces while protein entrapment increases. The addition of the immunomodulator, trehalose 6,6-dibehenate (TDB) to either the neutral or cationic liposomes did not affect the physiochemical characteristics of these liposome vesicles. However, the protective immune response, as indicated by the amount of IFN-? production, increases considerably when TDB is present. High levels of IFN-? were observed for cationic liposomes; however, there was a marked reduction in IFN-? release over time. Conversely, for neutral liposomes containing TDB, although the initial amount of IFN-? was slightly lower than the cationic equivalent, the overall protective immune responses of these neutral liposomes were effectively maintained over time, generating good levels of protection. To that end, although the addition of DSPC and Chol reduced the protective immunity of DDA:TDB liposomes, relatively high protection was observed for the neutral counterpart, DSPC:Chol:TDB, which may offer an effective neutral alternative to the DDA:TDB cationic system, especially for the delivery of either zwitterionic (neutral) or cationic molecules or antigens.

Calendar effects and the pricing of risk:the UK evidence

For some time there has been a puzzle surrounding the seasonal behaviour of stock returns. This paper demonstrates that there is an asymmetric relationship between risk and return across the different months of the year. The paper finds that systematic risk is only priced during the months of January, April and July. Variance risk and firm size are priced during several months of the year including January. An analysis of the relative behaviour of size based securities reveals that firm capitalization makes a valuable contribution to the magnitude of risk premiums.

Faces of pricing and profit planning in innovation at the doorstep of the EU:government pricing policy in the pharmaceutical sector in Turkey

The majority of research on the pharmaceutical sector has focused on an overall micro economic, medical oriented welfare issues, whereas the marketing management role of the innovative drug manufacturer has to a large extent been disregarded. Using the case of Turkey, through a series of in-depth interviews with highly innovative companies, other marketing management possibilities are explored based on broader definitions of value and transparency. Our results suggest that pharmaceutical companies as well as the government might have a too narrow focus of value and underestimate the potential long term benefits of a broader approach to marketing management and long term relationships between the various stakeholders.

Delegation of pricing authority to the sales force:an agency-theoretic perspective of its determinants and impact on performance

In industrial selling situations, the questions of what factors drive pricing authority delegation to salespeople and under what conditions price delegation is beneficial for the firm are often asked. To advance knowledge in this area, we (1) develop and empirically test a framework of important drivers of price delegation based on agency-theoretic research and (2) investigate the impact of price delegation on firm performance, taking into account agency theory variables as potential moderators. The study is based on data from a sample of 181 companies from the industrial machinery and electrical engineering industry in Germany. The results indicate that the degree of pricing delegation increases as information asymmetry between the salesperson and sales manager increases and as it becomes more difficult to monitor salespeople's efforts. Conversely, risk-aversion of salespeople is negatively related to the degree of price delegation. Furthermore, we find a positive effect of price delegation on firm performance, which is amplified when market-related uncertainty is high and when salespeople possess better customer-related information than their managers. Hence, our results clearly show that rigid, “one price fits all” policies are inappropriate in many B2B market situations. Instead, sales managers should grant their salespeople sufficient leeway to adapt prices to changing customer requirements and market conditions, especially in firms that operate in highly uncertain selling environments.

An incentivized auction based group-selling approach for demand response management in V2G systems

Vehicle-to-Grid (V2G) system with efficient Demand Response Management (DRM) is critical to solve the problem of supplying electricity by utilizing surplus electricity available at EVs. An incentivilized DRM approach is studied to reduce the system cost and maintain the system stability. EVs are motivated with dynamic pricing determined by the group-selling based auction. In the proposed approach, a number of aggregators sit on the first level auction responsible to communicate with a group of EVs. EVs as bidders consider Quality of Energy (QoE) requirements and report interests and decisions on the bidding process coordinated by the associated aggregator. Auction winners are determined based on the bidding prices and the amount of electricity sold by the EV bidders. We investigate the impact of the proposed mechanism on the system performance with maximum feedback power constraints of aggregators. The designed mechanism is proven to have essential economic properties. Simulation results indicate the proposed mechanism can reduce the system cost and offer EVs significant incentives to participate in the V2G DRM operation.

Radio frequency identification and time-driven activity based costing:RFID-TDABC application in warehousing

Purpose: This paper extends the use of Radio Frequency Identification (RFID) data for accounting of warehouse costs and services. Time Driven Activity Based Costing (TDABC) methodology is enhanced with the real-time collected RFID data about duration of warehouse activities. This allows warehouse managers to have accurate and instant calculations of costs. The RFID enhanced TDABC (RFID-TDABC) is proposed as a novel application of the RFID technology. Research Approach: Application of RFID-TDABC in a warehouse is implemented on warehouse processes of a case study company. Implementation covers receiving, put-away, order picking, and despatching. Findings and Originality: RFID technology is commonly used for the identification and tracking items. The use of the RFID generated information with the TDABC can be successfully extended to the area of costing. This RFID-TDABC costing model will benefit warehouse managers with accurate and instant calculations of costs. Research Impact: There are still unexplored benefits to RFID technology in its applications in warehousing and the wider supply chain. A multi-disciplinary research approach led to combining RFID technology and TDABC accounting method in order to propose RFID-TDABC. Combining methods and theories from different fields with RFID, may lead researchers to develop new techniques such as RFID-TDABC presented in this paper. Practical Impact: RFID-TDABC concept will be of value to practitioners by showing how warehouse costs can be accurately measured by using this approach. Providing better understanding of incurred costs may result in a further optimisation of warehousing operations, lowering costs of activities, and thus provide competitive pricing to customers. RFID-TDABC can be applied in a wider supply chain.

Using alcohol unit-marked glasses enhances capacity to monitor intake:evidence from a mixed-method intervention trial

AIMS: In the UK, people tend to have poor knowledge of government guidelines for alcohol use, and lack the motivation and skills required to use them to monitor their drinking. The study aim was to determine whether using glasses marked with such guidelines would improve knowledge and attitudes, increase frequency of counting units and lower alcohol intake. METHODS: A total of 450 adults in the UK participated in an intervention vs control study with 1-month follow-up. The intervention group was encouraged to use glasses supplied by the researchers that indicated the unit content of drinks of different strengths and volumes, and stated the intake guidelines. Data were collected online. A further more in-depth interview with 13 intervention group participants enquired into their experiences of using the glasses. RESULTS: Analyses adjusted for baseline variables showed that the intervention improved the following: knowledge of unit-based guidelines, ability to estimate the unit content of drinks, attitudes toward the guidelines and frequency of counting unit intake. However, there was no significant difference in alcohol consumption between the groups at follow-up. Interviews suggested that the glasses encouraged people to think about their drinking and to discuss alcohol with other people. The design of the glasses was not appealing to all, and their initial impact did not always persist. CONCLUSION: Use of unit-marked glasses led to changes in people's reported use of unit-based guidelines to monitor their drinking but, in the short term, no change in consumption. Qualitative data suggested that the glasses could have an impact at the individual level (on knowledge and attitudes) and at a broader level (by prompting discussion of alcohol use).