Physician Reimbursement, Time-Consistency and the Quality of Care
AbstractWe use a model of horizontal and vertical differentiation to study physicians´incentives to provide quality in the physician-patient relationship under price regulation. If the price is the only regulatory variable, the social planner cannot implement the first-best policy. Moreover, the second-best policy is time-inconsistent. Excess entry and first-best efficient total quality provision are observed in the game without commitment. Allowing physicians to compete in prices does not solve the commitment problem, since the competitive solution coincides with the time-consistent outcome. In the median-voter equilibrium the time-consistency problem is more severe.
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Bibliographic InfoArticle provided by Mohr Siebeck, Tübingen in its journal Journal of Institutional and Theoretical Economics.
Volume (Year): 159 (2003)
Issue (Month): 2 (June)
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Other versions of this item:
- Nuscheler, Robert, 2002. "Physician reimbursement, time-consistency and the quality of care," Discussion Papers, Research Unit: Market Processes and Governance FS IV 02-16, Social Science Research Center Berlin (WZB).
- I11 - Health, Education, and Welfare - - Health - - - Analysis of Health Care Markets
- I18 - Health, Education, and Welfare - - Health - - - Government Policy; Regulation; Public Health
- L51 - Industrial Organization - - Regulation and Industrial Policy - - - Economics of Regulation
- R10 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - General
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