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.
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Paper provided by Bavarian Graduate Program in Economics (BGPE) in its series Working Papers with number
022.
Find related papers by JEL classification: I11 - Health, Education, and Welfare - - Health - - - Analysis of Health Care Markets I12 - Health, Education, and Welfare - - Health - - - Health Production D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information