We deal with a principal-agent model in which the health authority acts as a principal for both a patient and a General Practitioner (GP). In this framework, we study the role of GPs as filters for secondary care, emphasizing the implications that patients' information may have for health authorities. We derive the GP's payment contract that induces him to perform diagnosis and follow its recommendation, as well as the level of copayments that provide patients with incentives to select the appropriate medical provider. We show that when patients can freely choose their provider, the quality of their information has contradictory effects. The higher this quality is, the lower the expected losses the patient bears. A higher quality, however, worsens the GP's agency problem, as GPs have more incentives to use patients' information as a substitute for their own diagnosis. We also analyze the role of patients' pressure for referral on the choice of the optimal system to access secondary care.
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Paper provided by Université catholique de Louvain, Center for Operations Research and Econometrics (CORE) in its series CORE Discussion Papers with number
2003089.
Find related papers by JEL classification: D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information H51 - Public Economics - - National Government Expenditures and Related Policies - - - Government Expenditures and Health I18 - Health, Education, and Welfare - - Health - - - Government Policy; Regulation; Public Health L51 - Industrial Organization - - Regulation and Industrial Policy - - - Economics of Regulation
References listed on IDEAS Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
Scott, Anthony, 2000.
"Economics of general practice,"
Handbook of Health Economics,
in: A. J. Culyer & J. P. Newhouse (ed.), Handbook of Health Economics, edition 1, volume 1, chapter 22, pages 1175-1200
Elsevier.
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