The interaction of insurance and the market for physician services is considered in a model where imperfectly informed consumers rely on doctors for advice on the utilization of services and there is monopolistic competition among physicians on the basis of price and the quality of their advice. Equilibria under fee for service and capitation are compared, and I analyze the use of a system of capitation and partial supply-side cost sharing to attain an outcome superior to either pure fee for service or pure capitation.
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Length: 19 pages Date of creation: 1997 Date of revision: Handle: RePEc:uwo:uwowop:9705
Contact details of provider: Postal: Department of Economics, Reference Centre, Social Science Centre, University of Western Ontario, London, Ontario, Canada N6A 5C2 Phone: 519-661-2111 Ext.85228 Web page: http://economics.uwo.ca/econref/WorkingPapers/
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