Enhancing performance in health care: A theoretical perspective on agency and the role of information

This paper examines the role of information in securing control of health c are systems. The discussion focuses on the impact of the proposed 'Performa nce Framework', which entails a significant increase in the importance atta ched to formal performance indicators in the management of the UK National Health Service. The paper starts with a discussion of the role of performan ce data in securing organizational control within health care systems and s ummarizes recent research into the behavioural consequences of seeking to c ontrol health care agents using such information. A theoretical principal/a gent model is then used to illustrate the incentives that exist for dysfunc tional behaviour within health care when only imperfect information systems are available. The theoretical results are then examined in the context of a qualitative empirical study, which elicited the perceptions of managers and health care professionals connected with eight NHS hospitals. The study confirmed the existence and importance of serious dysfunctional consequenc es arising from the use of information as a means of control, and concludes that the Performance Framework will be successful only if it is used in ca reful conjunction with other means of control. Copyright (C) 2000 John Wile y & Sons, Ltd.