Incentives, Information, and Effective Governance in Healthcare Systems: The Role of Local Knowledge and Nonmonetary Incentives : Focus on the Primary Care Sector

Abstract

Healthcare systems worldwide face intensifying financial and operational pressures, compelling policymakers to enhance efficiency without undermining equity or quality. While reforms have traditionally emphasized financial incentives, market-based mechanisms and administrative controls, these approaches often overlook the crucial roles of intrinsic motivation, professional ethics, and local knowledge in shaping provider behavior and patient outcomes.

This thesis investigates how nonmonetary incentives and information dynamics influence governance and performance in healthcare, with a focus on the primary care sector. It adopts a conceptual, interdisciplinary approach that synthesises insights from economics, behavioral research, institutional and organizational theory, and health sciences to analyse how formal policies can better align with informal drivers of performance at the front lines of care.

A key contribution is the introduction of core healthcare services as 'tacit goods'—whose essential quality dimensions are difficult to observe and measure, and whose effective provision depends on trust, professional autonomy, and nonmonetary incentives such as intrinsic and prosocial motivation. The thesis also extends the concept of triple agency to examine how primary care providers navigate competing accountabilities to patients, payers, and provider organizations under resource constraints.

By integrating nonmonetary factors—such as intrinsic motivation, prosocial motivation, professional ethics, and social incentives—into the analysis of healthcare governance, the study offers a nuanced understanding of how to improve system efficiency and sustainability without over-reliance on financial incentives or top‐down controls. The findings underscore that effective governance requires balancing monetary and nonmonetary incentives, empowering local knowledge and professional autonomy, and fostering trust within the system. By broadening the analysis of incentives in complex service environments, this perspective contributes to economic theory and offers policymakers practical insights for designing healthcare systems that are both efficient and resilient, grounded in motivation-sensitive and context-aware governance.