This paper sets out to evaluate the potential of financial performance benchmarking as an expenditure control tool for a national pathology service comprising both public and private service providers.
Primary data were provided by direct consultation with a wide range of stakeholders, whose experience and perspectives were sought primarily through informal face‐to‐face interviews. The authors analyse these informant contributions alongside official reports and the published literature on dual public‐private health service provision.
Informants identified potential advantages and pitfalls in comparative pathology benchmarking for expenditure control. They also identified some significant negative implications for health service quality and suggested related compromises. Often misunderstood cost benchmarking issues are clarified in the paper.
Several areas of importance for further investigation are suggested.
The paper concludes that appropriate performance benchmarking can be applied to New Zealand pathology services as a useful service rationalisation tool and a realistic price‐signalling device, provided that certain safeguards on health service quality are in place.
General issues complicating financial performance benchmarking across sectors in a mixed economy for health service provision are identified for the guidance of researchers, decision‐makers and planners.
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