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Reforming incentive schemes under political constraints: the physician agency

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  • Gabrielle DEMANGE
  • Pierre-Yves GEOFFARD

Abstract

In many developed countries attempts to reform physicians payment schemes have failed. To analyze some of the difficulties, this paper studies reforms of payment schemes in situations such as the physician agency, where the quality of the good produced is imperfectly observable by the payer. We first study the situation, common in many countries, where physicians face a single scheme. We identify conditions under which no reform can both obtain the consent of a large proportion of physicians (political constraints) and improve patients welfare. We then study whether a menu of contracts, with or without cross subsidies, may solve the difficulties generated by the heterogeneity of producers practice.

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Bibliographic Info

Article provided by ENSAE in its journal Annals of Economics and Statistics.

Volume (Year): (2006)
Issue (Month): 83-84 ()
Pages: 221-250

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Handle: RePEc:adr:anecst:y:2006:i:83-84:p:09

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  1. Ching-to Albert Ma & Thomas G. McGuire, 1995. "Optimal Health Insurance and Provider Payment," Papers 0059, Boston University - Industry Studies Programme.
  2. McGuire, Thomas G., 2000. "Physician agency," Handbook of Health Economics, in: A. J. Culyer & J. P. Newhouse (ed.), Handbook of Health Economics, edition 1, volume 1, chapter 9, pages 461-536 Elsevier.
  3. Holly, Alberto & Gardiol, Lucien & Domenighetti, Gianfranco & Brigitte Bisig, 1998. "An econometric model of health care utilization and health insurance in Switzerland," European Economic Review, Elsevier, vol. 42(3-5), pages 513-522, May.
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Cited by:
  1. David Bardey & Jean-Charles Rochet, 2010. "Competition Among Health Plans: A Two-Sided Market Approach," Journal of Economics & Management Strategy, Wiley Blackwell, vol. 19(2), pages 435-451, 06.
  2. Bontems, Philippe & Rotillon, Gilles & Turpin, Nadine, 2005. "Acceptable Reforms of Agri-Environmental Policies," 2005 Annual meeting, July 24-27, Providence, RI 19150, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
  3. P. Bontems & N. Turpin & Gilles Rotillon, 2003. "Acceptibility constraints and self-selecting agri-environmental policies," THEMA Working Papers 2003-14, THEMA (THéorie Economique, Modélisation et Applications), Université de Cergy-Pontoise.

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