Choice of Contracts in the British National Health Service: An Empirical Study

Following major reforms of the British National Health Service (NHS) in 1990, the roles of purchasing and providing health services were separated, with the relationship between purchasers and providers governed by contracts. Using a mixed multinomial logit analysis, we show how this policy shift led to a selection of contracts that is consistent with the predictions of a simple model, based on contract theory, in which the characteristics of the health services being purchased and of the contracting parties influence the choice of contract form. The paper thus provides evidence in support of the practical relevance of theory in understanding health care market reform.

Money Cycles

Operating overheads are widespread and lead to concentrated bursts of activity. To transfer resources between active and idle spells, agents demand financial assets. Futures contracts and lotteries are unsuitable, as they have substantial overheads of their own.We show that money – under efficient monetary policy – is a liquid asset that leads to efficient allocations. Under all other policies, agents follow inefficient “money cycle” patterns of saving, activity, and inactivity. Agents spend their money too quickly – a “hot potato effect of inflation”. We show that inflation can stimulate inefficiently high aggregate output.

Dynamic Relational Contracts under Complete Information

This paper considers a long-term relationship between two agents who both undertake a costly action or investment that together produces a joint benefit. Agents have an opportunity to expropriate some of the joint benefit for their own use. Two cases are considered: (i) where agents are risk neutral and are subject to limited liability constraints and (ii) where agents are risk averse, have quasi-linear preferences in consumption and actions but where limited liability constraints do not bind. The question asked is how to structure the investments and division of the surplus over time so as to avoid expropriation. In the risk-neutral case, there may be an initial phase in which one agent overinvests and the other underinvests. However, both actions and surplus converge monotonically to a stationary state in which there is no overinvestment and surplus is at its maximum subject to the constraints. In the risk-averse case, there is no overinvestment. For this case, we establish that dynamics may or may not be monotonic depending on whether or not it is possible to sustain a first-best allocation. If the first-best allocation is not sustainable, then there is a trade-off between risk sharing and surplus maximization. In general, surplus will not be at its constrained maximum even in the long run.

Memory in contracts: the experience of the EBRD (1991-2003)

The objective of this paper is to identify the role of memory as a screening device in repeated contracts with asymmetric information in financial intermediation. We use an original dataset from the European Bank for Reconstruction and Development. We propose a simple empirical method to capture the role of memory using the client's reputation. Our results unambiguously isolate the dominant effect of memory on the bank's lending decisions over market factors in the case of established clients.

Growth, selection and appropriate contracts

We study a dynamic model where growth requires both long-term investment and the selection of talented managers. When ability is not ex-ante observable and contracts are incomplete, managerial selection imposes a cost, as managers facing the risk of being replaced tend to choose a sub-optimally low level of long-term investment. This generates a trade-off between selection and investment that has implications for the choice of contractual relationships. Our analysis shows that rigid long-term contracts sacrificing managerial selection may be optimal at early stages of economic development and when access to information is limited. As the economy grows, however, knowledge accumulation increases the return to talent and makes it optimal to adopt flexible contractual relationships, where managerial selection is implemented even at the cost of lower investment. Better institutions, in the form of a richer contracting environment and less severe informational frictions, speed up the transition to short-term relationships.

Decentralization of contracts with interim sidecontracting

This paper gives a new explanation for the phenomena of subcontracting. A model in which a principal contracts two agents who work in a sequence on a project, have soft information and can collude is considered. Side-contracts between agents can be signed at any stage of the game. Due to limited liability and moral hazard agents obtain a rent. The principal’s problem is to find the preferable contracting structure. It is shown that in this setting a decentralized contracting structure can be superior to a centralized structure for the principal. The paper derives the conditions under which this holds. Journal of Economic Literature Classification Numbers: D23, D82, L14, L22. Keywords: Contract delegation, Collusion, Interim side-contracting, Moral hazard.

Incidence of presumed endophthalmitis after intravitreal injection performed in the operating room: a retrospective multicenter study.

PURPOSE: To evaluate the incidence of presumed endophthalmitis (EO) after intravitreal injection (IVI) of anti-vascular endothelial growth factor agents performed in the operating room. METHODS: Retrospective study at 2 Swiss eye hospitals between 2004 and 2012. Hospital records were used to identify patients treated with an IVI of an anti-vascular endothelial growth factor agent between 2004 and 2012 and those treated for EO, defined as any intraocular inflammation treated with intravitreal antibiotics. All IVIs were performed using standard sterile technique in a Swiss Class 1 operating room. No patient received preinjection topical antibiotics. Postinjection topical antibiotics were used only in one hospital. RESULTS: A total of 40,011 IVIs were performed at the 2 centers during the study period. Of the IVIs, ranibizumab was injected in 36,398 (91%), bevacizumab in 3,518 (9%), aflibercept in 89 (0.2%), and pegaptanib in 6 (<0.1%). Three cases of post-IVI presumed EO occurred, yielding a combined incidence of 0.0075% per injection (95% confidence interval: 0.0026-0.0220%) or 1 case per 13,337 IVIs. Two of the three cases of EO occurred in patients using post-IVI antibiotics. All three cases followed ranibizumab injection and were culture negative by anterior chamber tap or vitreous biopsy. CONCLUSION: The risk of EO after IVI performed under the sterile conditions of the operating room was very low.

Circulation of hantaviruses in the influence area of the Cuiabá-Santarém Highway

We describe evidence of circulation of hantaviruses in the influence area of the Santarém-Cuiabá Highway (BR-163) in the Brazilian Amazon through the prevalence of specific antibodies against hantaviruses in inhabitants living in four municipalities of this area: Novo Progresso (2.16%) and Trairão (4.37%), in state of Pará (PA), and Gua-rantã do Norte (4.74%) and Marcelândia (9.43%), in state of Mato Grosso. We also demonstrate the ongoing association between Castelo dos Sonhos virus (CASV) and hantavirus pulmonary syndrome (HPS) cases in the Castelo dos Sonhos district (municipality of Altamira, PA) and the first report of CASV in the municipalities of Novo Progresso and Guarantã do Norte. The results of this work highlight the risk for a possible increase in the number of HPS cases and the emergence of new hantavirus lineages associated with deforestation in this Amazonian area after the conclusion of paving works on BR-163 Highway.

2004 Highway Accomplishment Program, July 1, 2003 to June 30, 2004

Future plans for funding for Iowa Department of Transportation Report

Annual Report of Highway Division Highway Research and Development in Iowa, 2003

Annual report for Iowa Department of Transportation.

Iowa Problem Indentification for Federal 402 State and Community Highway Safety Programs, Iowa Department of Public Safety, January, 2002

The major objective of this problem identification document is the determination of the relative severity of traffic safety problems in each of the 99 counties. The National Highway Traffic Safety Administration and the Iowa Governor's Traffic Safety Bureau are committed to the reduction of death and injury on the nation's roads. As part of its duty in administering federal traffic safety funds in the State of Iowa, the Governor's Traffic Safety Bureau conducts a comprehensive Problem Identification update each year.