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Physicians' payment contracts, treatment decisions and diagnosis accuracy

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  • Izabela Jelovac

    (Dpto. De Fundamentos do Análise Económico, Facultade de CC, EE e EE, Universidade de Vigo, Vigo, Spain)

Abstract

We derive optimal payment contracts for physicians when neither physicians' effort to gather information about the patient's health condition (diagnosis effort) nor the actual patient's health condition (physicians' private information) are contractible. In a model where the patient is allowed to demand health care on more than one occasion, we show that, in general, the optimal payment contract includes supply-side cost sharing. This provides the physician with incentives to provide the most adequate treatment and to gather an informative signal about the patient's illness, to decrease the likelihood of future cost sharing. However, for some extreme values of the parameters of the model, we show that a public insurer may prefer to induce some 'blind' decision making. Copyright © 2001 John Wiley & Sons, Ltd.

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Bibliographic Info

Article provided by John Wiley & Sons, Ltd. in its journal Health Economics.

Volume (Year): 10 (2001)
Issue (Month): 1 ()
Pages: 9-25

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Handle: RePEc:wly:hlthec:v:10:y:2001:i:1:p:9-25

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Web page: http://www3.interscience.wiley.com/cgi-bin/jhome/5749

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  1. Martin Gaynor, 1994. "Issues in the Industrial Organization of the Market for Physician Services," NBER Working Papers 4695, National Bureau of Economic Research, Inc.
  2. Ma, Ching-to Albert, 1994. "Health Care Payment Systems: Cost and Quality Incentives," Journal of Economics & Management Strategy, Wiley Blackwell, Wiley Blackwell, vol. 3(1), pages 93-112, Spring.
  3. Ellis, Randall P. & McGuire, Thomas G., 1990. "Optimal payment systems for health services," Journal of Health Economics, Elsevier, Elsevier, vol. 9(4), pages 375-396, December.
  4. Chalkley, M. & Malcomson, J.M., 1995. "Contracting for health services when patient demand does not reflect quality," Discussion Paper Series In Economics And Econometrics 9514, Economics Division, School of Social Sciences, University of Southampton.
  5. Ching-to Albert Ma & Thomas G. McGuire, 1995. "Optimal Health Insurance and Provider Payment," Papers, Boston University - Industry Studies Programme 0059, Boston University - Industry Studies Programme.
  6. Randall P. Ellis & Thomas G. McGuire, 1993. "Supply-Side and Demand-Side Cost Sharing in Health Care," Journal of Economic Perspectives, American Economic Association, American Economic Association, vol. 7(4), pages 135-151, Fall.
  7. Dranove, David, 1988. "Demand Inducement and the Physician/Patient Relationship," Economic Inquiry, Western Economic Association International, Western Economic Association International, vol. 26(2), pages 281-98, April.
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Cited by:
  1. Massimo Filippini & Fabian Heimsch & Giuliano Masiero, 2013. "Antibiotic consumption and the role of dispensing physicians," CEPRA working paper, USI Università della Svizzera italiana 1302, USI Università della Svizzera italiana.
  2. Massimo Filippini & Giuliano Masiero & Karine Moschetti, 2010. "Dispensing practices and antibiotic use," Working Papers 1006, Department of Economics and Technology Management, University of Bergamo.
  3. Paula González, 2004. "Should physicians' dual practice be limited? An incentive approach," Health Economics, John Wiley & Sons, Ltd., John Wiley & Sons, Ltd., vol. 13(6), pages 505-524.
  4. GONZALEZ, Paula, 2003. "The "gatekeeping" role of general practitioners. Does patients' information matter ?," CORE Discussion Papers, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE) 2003089, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
  5. Jelovac, Izabela & Macho-Stadler, Ines, 2002. "Comparing organizational structures in health services," Journal of Economic Behavior & Organization, Elsevier, Elsevier, vol. 49(4), pages 501-522, December.
  6. Massimo Filippini & Giuliano Masiero & Karine Moschetti, 2009. "Physician dispensing and antibiotic prescriptions," Quaderni della facoltà di Scienze economiche dell'Università di Lugano, USI Università della Svizzera italiana 0908, USI Università della Svizzera italiana.
  7. Marinoso, Begona Garcia & Jelovac, Izabela, 2003. "GPs' payment contracts and their referral practice," Journal of Health Economics, Elsevier, Elsevier, vol. 22(4), pages 617-635, July.
  8. Lim, Jae-Young & Jo, Changik, 2009. "The Effect of Patient's Asymmetric Information Problem on Medical Care Utilization with Consideration of a Patient's Ex-ante Health Status," Hitotsubashi Journal of Economics, Hitotsubashi University, Hitotsubashi University, vol. 50(2), pages 37-58, December.
  9. Olga Milliken & Rose Anne Devlin & Vicky Barham & William Hogg & Simone Dahrouge & Grant Russell, 2008. "Comparative Efficiency Assessment of Primary Care Models Using Data Envelopment Analysis," Working Papers, University of Ottawa, Department of Economics 0802E, University of Ottawa, Department of Economics.
  10. Barigozzi, Francesca & Levaggi, Rosella, 2008. "Emotions in physician agency," Health Policy, Elsevier, Elsevier, vol. 88(1), pages 1-14, October.
  11. Schuster, Stephan, 2012. "Applications in Agent-Based Computational Economics," MPRA Paper 47201, University Library of Munich, Germany.
  12. F. Barigozzi & R. Levaggi, 2005. "New Developments in Physician Agency: the Role of Patient Information," Working Papers 550, Dipartimento Scienze Economiche, Universita' di Bologna.
  13. Begoña García Mariñoso & Izabela Jelovac, 2000. "GPs’ Payment Contracts and their Referral Policy," Documentos de trabajo - Analise Economica, IDEGA - Instituto Universitario de Estudios e Desenvolvemento de Galicia 0010, IDEGA - Instituto Universitario de Estudios e Desenvolvemento de Galicia.

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