Ownership, Control, Agency and Residual Claims in Healthcare:Insights on Co-operatives and Non-profit Organisations

Abstract

Many issues surrounding healthcare entities’ performance can be traced to their governance and ownership. Increasingly, public services are being provided by non-profit organizations and/or cooperatives, particularly in the healthcare sector. This is not unproblematic. We draw on the conceptual separation of ownership and control, and the notion of firm ownership to derive a taxonomy of dimensions along which a contractual- and property rights theory of the firm can be structured, in order to determine the nature of firms’ differences. We utilize the taxonomy to illustrate important distinctions between non-profit and cooperative firms in the primary healthcare sector and propose testable hypotheses. Funders and regulators must recognise the differences between these firms, if public funding of healthcare is to achieve the expected outcomes.