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An Equilibrium Model of General Practitioner Payment Schemes

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  • Donald J. Wright

Abstract

In an environment where GPs are of differing quality and heterogeneous patients have different preferences for quality, it is shown that fee-for-service coupled with balance billing is a superior payment scheme to just fee-for-service or capitation payments as it generates an efficient allocation of GPs between high and low quality and an efficient allocation of patients between GPs. Where patients have more than one condition it is shown that fee-for-service allows patients to seek treatment from GPs of differing quality conditional on the medical condition they have.

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File URL: http://hdl.handle.net/10.1111/1475-4932.12058
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Bibliographic Info

Article provided by The Economic Society of Australia in its journal The Economic Record.

Volume (Year): 89 (2013)
Issue (Month): 286 (09)
Pages: 287-299

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Handle: RePEc:bla:ecorec:v:89:y:2013:i:286:p:287-299

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  1. Karlsson, Martin, 2007. "Quality incentives for GPs in a regulated market," Journal of Health Economics, Elsevier, vol. 26(4), pages 699-720, July.
  2. Hugh Gravelle & Giuliano Masiero, . "Quality incentives in a regulated market with imperfect information and switching costs: capitation in general practice," Discussion Papers 00/18, Department of Economics, University of York.
  3. Glazer, Jacob & Glazer, Jacob & McGuire, Thomas G., 1993. "Should physicians be permitted to 'balance bill' patients?," Journal of Health Economics, Elsevier, vol. 12(3), pages 239-258, October.
  4. Ellis, Randall P., 1998. "Creaming, skimping and dumping: provider competition on the intensive and extensive margins1," Journal of Health Economics, Elsevier, vol. 17(5), pages 537-555, October.
  5. Elizabeth Savage & Glenn Jones, 2004. "An Analysis of the General Practice Access Scheme on GP Incomes, Bulk Billing and Consumer Copayments," Australian Economic Review, The University of Melbourne, Melbourne Institute of Applied Economic and Social Research, vol. 37(1), pages 31-40, 03.
  6. Mussa, Michael & Rosen, Sherwin, 1978. "Monopoly and product quality," Journal of Economic Theory, Elsevier, vol. 18(2), pages 301-317, August.
  7. Jean Tirole, 1988. "The Theory of Industrial Organization," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262200716, December.
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