Information asymmetry, insurance, and the decision to hospitalize
AbstractIn a theoretical model, we analyze the effects of various kinds of demand- and supply-side incentives in the context of a model in which patients and doctors must decide not only on an aggregate quantity of health services to use in treating various kinds of illness, but also have a choice between different kinds of providers (in particular, outpatient services rendered by primary-care physicians or inpatient services provided by hospital-based specialists). We present two broad models, the traditional fee-for-service payment scheme (with an without information asymmetry) and a managed care setup where physicians are paid via capitation. We find that a second-best optimal managed care plan may dominate (under certain conditions) a second-best optimal conventional plan with cost control through demand-side cost sharing.
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Bibliographic InfoArticle provided by Elsevier in its journal Journal of Health Economics.
Volume (Year): 24 (2005)
Issue (Month): 4 (July)
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Web page: http://www.elsevier.com/locate/inca/505560
Other versions of this item:
- Åke Blomqvist & Pierre Thomas Léger, 2001. "Information Asymmetry, Insurance, and the Decision to Hospitalize," Cahiers de recherche 01-03, HEC Montréal, Institut d'économie appliquée.
- Åke Blomqvist & Pierre Thomas Léger, 2002. "Information Asymmetry, Insurance, and the Decision to Hospitalize," CIRANO Working Papers 2002s-06, CIRANO.
- Åke Blomqvist & Pierre Thomas Léger, 2003. "Information Asymmetry, Insurance, and the Decision to Hospitalize," Departmental Working Papers wp0305, National University of Singapore, Department of Economics.
- I1 - Health, Education, and Welfare - - Health
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