Contracts Targets Perverse Incentives

There are reports of perverse incentives both in the private sector and in the NHS. In the private sector the incentive is to continue earning income, even if that involves cultivating patients' dependency or perpetuating contracts for outmoded practices. In the NHS, chronic under-resourcing creates an incentive to free beds in hospitals, even if that means arbitrary refusal of treatment, premature discharges, or encouraging patients' deaths.

It is not possible to create a system of contracts or performance targets without perverse incentives. The only safeguard is democratic watchdogs with the power to overrule contracts and performance targets.