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Double Moral Hazard and Outcome-based Remuneration of Physicians

Author

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  • Udo Schneider

Abstract

The discussion about health care systems focuses on the dynamics of expenditures and on the weak growth of the revenue base. In this discussion it is widely overseen that medical expenditures and supply of medical services crucially depend on the compensation of physician services. The paper analyses the implementation of an outcome-based payment system in the presence of asymmetric information. Two cases are studied in detail: first, the common situation of physician’s moral hazard and second, a double moral hazard model. The choice of insurance and payment contracts then depends on the characteristics of asymmetric information.

Suggested Citation

  • Udo Schneider, 2007. "Double Moral Hazard and Outcome-based Remuneration of Physicians," Working Papers 022, Bavarian Graduate Program in Economics (BGPE).
    • Handle: RePEc:bav:wpaper:022_schneider
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    File URL: http://www.bgpe.de/texte/DP/022_schneider.pdf
    File Function: First version, 2007
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    More about this item

    Keywords

    outcome-based remuneration; double moral hazard; health policy;
    All these keywords.

    JEL classification:

    • I11 - Health, Education, and Welfare - - Health - - - Analysis of Health Care Markets
    • I12 - Health, Education, and Welfare - - Health - - - Health Behavior
    • D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information; Mechanism Design

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