Possibilities and challenges of performance-based pricing models in Finnish occupational health services

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Volume Title

School of Business | Master's thesis

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Date

2012

Department

Department of Management and International Business
Johtamisen ja kansainvälisen liiketoiminnan laitos

Major/Subject

Organization and Management
Organisaatiot ja johtaminen

Mcode

Degree programme

Language

en

Pages

66

Series

Abstract

The aim of this thesis is to investigate the challenges and possibilities related to performance-based pricing in the context of Finnish occupational health services as well as to identify the prerequisites for engaging in such pricing schemes from both purchasers' and sellers' perspectives. The research framework is based on agency theory which explicates the dynamics of purchaser-provider relationships. This study is conducted as a qualitative interview study. The empirical part of the thesis consists of semi-structured interviews with 10 representatives of occupational health service providers, HR professionals responsible of purchasing occupational health services as well as researchers. The empirical data was analyzed with a thematic classification method. The findings of the study suggest that there are notable challenges related to implementing performance-based pricing models in Finnish occupational health services: outcome uncertainty, aggregated outcome, ethical considerations related to physician-patient relationships and the lack of purchasing expertise in the employer organizations. However, these challenges are not regarded as insurmountable barriers to performance-based models. If certain prerequisites are met, both human resource representatives and occupational health service providers' representatives were willing to consider such models. More specifically, the issues related to contract design, incentives structures, performance measurement and trust in the buyer-provider relationships were considered essential for the implementation of performance-based pricing models.

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Keywords

occupational health, työterveys, pricing, hinnoittelu, performance pay, tulospalkkio, personnel management, henkilöstöhallinto

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Citation

Permanent link to this item

https://urn.fi/URN:NBN:fi:aalto-201305163150

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[gradu] Kauppakorkeakoulu / BIZ