Australian Health Review Australian Health Review Society
Journal of the Australian Healthcare & Hospitals Association
RESEARCH ARTICLE (Open Access)

Financial incentives and the health workforce

Anthony Scott A D and Luke B. Connelly B C
+ Author Affiliations
- Author Affiliations

A The University of Melbourne, Melbourne Institute of Applied Economic and Social Research, and School of Population Health, Level 6, Alan Gilbert Building, 161 Barry Street, Melbourne, VIC 3010, Australia.

B The University of Melbourne, Australian Health Workforce Institute (AHWI), Level 3, 766 Elizabeth Street, Parkville, VIC 3010, Australia.

C The University of Queensland, Australian Centre for Economic Research on Health (ACERH) and Centre of National Research on Disability and Rehabilitation Medicine (CONROD), Ground Floor, Edith Cavell Building, Royal Brisbane and Women’s Hospital, Herston, QLD 4029, Australia.

D Corresponding author. Email: a.scott@unimelb.edu.au

Australian Health Review 35(3) 273-277 https://doi.org/10.1071/AH10904
Submitted: 29 March 2010  Accepted: 4 January 2011   Published: 25 August 2011

Abstract

Changes to the remuneration of medical practitioners are currently being considered in Australia. In this paper, we provide a discussion of financial incentives in healthcare markets and their effects on health professionals’ behaviour. After defining incentives, the paper focuses on the design of incentive schemes for the health workforce. It discusses several issues that should be considered when designing incentives, illustrated with some Australian examples. What are the objectives of the incentive scheme? What types of incentives can be used and under what circumstances? What is the empirical evidence around the effects of incentive schemes? What unintended consequences might exist? The paper concludes with a set of principles around which incentives can be designed. These principles might be used to inform the current debate about revisions to the incentives that are faced by medical practitioners in Australia.


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