The influence of health care organisations on health system performance Katharina Hauck, Nigel Rice, Peter Smith Centre for Health Economics, University of York, York, UK Objectives: The governments of many countries are undertaking initiatives to assess the extent to which health care organisations full important objectives of health care, such as health improvement, fair access and efciency. However, the extent to which these health care organisations can inuence these objectives is unclear. The purpose of this study is to examine the potential inuence of English National Health Service territorial health authorities on 14 indicators of system performance. Methods: The study uses performance data relating to approximately 5000 small geographical areas with average populations of 10 000. Multi-level statistical models are used to attribute variation in the indicators to three hierarchical levels – small areas, district health authorities and regional health authorities – after controlling for socio-demographic characteristics. Variations in indicators attributable to district or regional level give an indication of the extent to which health authorities may inuence performance. Results: After adjusting for socio-demographic characteristics, the proportion of variation in performance attributable to district health authorities varies from about 8% (for standardised mortality ratios) to about 76% (for waiting time for elective surgery). Variation at the regional level is smaller than at the district level. Conclusions: There appear to be very large variations between indicators in the extent to which health care organisations can inuence health system performance. Choice of performance indicators and the managerial incentive regime based on the indicators should recognise this variability, as it is highly dysfunctional to hold managers accountable for measures of performance that are beyond their control. Journal of Health Services Research & Policy Vol 8 No 2, 2003: 68–74 # The Royal Society of Medicine Press Ltd 2003 Introduction Performance assessment of health systems is high on the political agenda in many countries. In England the government has introduced a Performance Assessment Framework to assess ‘. . . features of the health care system which matter most to patients and the public’. 1,2 The Health Care Financing Administration of the USA funded a major study to develop a systematic programme for monitoring the quality of medical care provided to Medicare beneciaries. 3 The Commerce Department’s National Institute of Standards and Technology in the USA developed the Baldrige Health Care Criteria for Performance Excellence to help ‘. . . health care organisations assess and improve their overall performance’. 4 The Australian Government publishes an annual Outcome Performance Report 5 and the Canadian Institute for Health Information publishes an annual set of performance indicators for the largest health regions. 6 There is also increasing interest in performance assessment at the international level. The World Health Organization devoted the World Health Report 2000 to the question of how to improve performance of health systems. 7 It presented an index of national health systems’ performance in achieving ve overall goals, including health outcomes, responsiveness to the expectations of the population and fairness of nancial contribution. The OECD has instigated a three-year project with the objective of measuring and analysing health system performance and explaining variations in performance. 8 There is an important debate as to what constitutes a ‘health system’. The World Health Report 2000 denes it as those institutions ‘whose primary purpose is to promote, restore or maintain health’. Clearly, this denition may extend well beyond the conventional notion of personal health care. In the English National Health Service (NHS), local responsibility for super- vising the health system was until recently devolved to geographically dened health authorities, which were charged with organising personal and collective health services for the populations within their boundaries. This remit extended beyond the purchasing of health care, to supervising public health and liaising with other public and voluntary agencies, such as local government. 68 J Health Serv Res Policy Vol 8 No 2 April 2003 Original research Katharina Hauck MSc, Research Fellow, Nigel Rice PhD, Senior Research Fellow, Peter C Smith BA, Professor of Health Economics, Centre for Health Economics, University of York, York YO10 5DD, UK. Correspondence to: P CS.