| This study presents and discusses the impact of health care restructuring in British Columbia on the contracting out practices in this sector. The empirical evidence is discussed and two models are applied to the contracting out practices: (1) transaction cost economics and (2) public choice.;The results of this study are evaluated against the two models to determine whether contracting out decisions in the health sector can be explained by the transaction cost model of efficiency or the public choice model of individual self-interest.;The study provides little support for the transaction cost model and some support for the public choice model. The findings provide support for the importance of uncertainty and service complexity. More importantly, the results suggest that institutional constraints, such as government funding, managerial flexibility, and union relationships, are important considerations in the contracting out decision. |
