Agreement between payer(s) and provider(s) that defines in advance the health services to be purchased, the quantity, quality, and price.

Block contracts: The purchaser pays a fixed sum for services to be provided, and estimated activity levels are identified, but no additional sums are payable if actual activity is higher, and no money is repaid if activity levels are lower.

Cost and volume contracts seek to provide incentives and reward marketing efforts that result in an increase in demand/referral beyond the limit set in a block contract.

Cost per case contracts seek to recover payment to cover full costs for each consultant episode, operative procedure, course of treatment, or direct stay. The latter type is closest to the one traditionally used in countries with a contract model.

European Observatory on Health Systems and Policies. Glossary. Internet. Accessed September 8, 2009.