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Optimal Contracts for Health Services in the Presence of Waiting Times and Asymmetric Information

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  • Siciliani Luigi

    (University of York, UK)

Abstract

This study presents a model of optimal contracting for health services in the presence of excess demand and waiting times. We assume that: i) hospitals differ in their demand for treatment; ii) potential demand is private information of the provider; iii) specialists can dump patients; iv) activity and waiting times are contractible. A separating equilibrium exists when it is optimal for the purchaser to contract more activity and longer waiting times to those hospitals with higher demand. Hospitals with low demand gain informational rents. A pooling equilibrium may also occur.

Suggested Citation

  • Siciliani Luigi, 2007. "Optimal Contracts for Health Services in the Presence of Waiting Times and Asymmetric Information," The B.E. Journal of Economic Analysis & Policy, De Gruyter, vol. 7(1), pages 1-27, August.
    • Handle: RePEc:bpj:bejeap:v:7:y:2007:i:1:n:40
    DOI: 10.2202/1935-1682.1661
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    Cited by:

    1. Houyuan Jiang & Zhan Pang & Sergei Savin, 2012. "Performance-Based Contracts for Outpatient Medical Services," Manufacturing & Service Operations Management, INFORMS, vol. 14(4), pages 654-669, October.
    2. Huw Dixon & Luigi Siciliani, 2009. "Waiting Time Targets in Healthcare Markets: How Long Are We Waiting?," Discussion Papers 09/05, Department of Economics, University of York.
    3. Agovino, Massimiliano & Musella, Gaetano & Scaletti, Alessandro, 2022. "Equilibrium and efficiency in the first aid services market: The case of the emergency department of Sorrento," Socio-Economic Planning Sciences, Elsevier, vol. 82(PB).
    4. Sofía Garrido & Emilio Gutiérrez, 2019. "Time goes by so slowly (for those who wait): a field experiment in health care," Latin American Economic Review, Springer;Centro de Investigaciòn y Docencia Económica (CIDE), vol. 28(1), pages 1-17, December.
    5. Dixon, Huw & Siciliani, Luigi, 2009. "Waiting-time targets in the healthcare sector: How long are we waiting?," Journal of Health Economics, Elsevier, vol. 28(6), pages 1081-1098, December.
    6. Kuhn, Michael & Siciliani, Luigi, 2013. "Manipulation and auditing of public sector contracts," European Journal of Political Economy, Elsevier, vol. 32(C), pages 251-267.
    7. Michael Leung, 2010. "Primary care delivery, risk pooling and economic efficiency," The European Journal of Health Economics, Springer;Deutsche Gesellschaft für Gesundheitsökonomie (DGGÖ), vol. 11(2), pages 161-175, April.

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