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Reforming incentive schemes under political constraints: the physician agency

Author

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  • Gabrielle Demange
  • Pierre-Yves Geoffard

Abstract

In many developed countries attempts to reform physicians payment schemes have failed. To analyze some of the difficulties, this paper studies reforms of payment schemes in situations such as the physician agency, where the quality of the good produced is imperfectly observable by the payer. We first study the situation, common in many countries, where physicians face a single scheme. We identify conditions under which no reform can both obtain the consent of a large proportion of physicians (political constraints) and improve patients welfare. We then study whether a menu of contracts, with or without cross subsidies, may solve the difficulties generated by the heterogeneity of producers practice.

Suggested Citation

  • Gabrielle Demange & Pierre-Yves Geoffard, 2006. "Reforming incentive schemes under political constraints: the physician agency," Annals of Economics and Statistics, GENES, issue 83-84, pages 221-250.
    • Handle: RePEc:adr:anecst:y:2006:i:83-84:p:221-250
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    File URL: http://www.jstor.org/stable/20079169
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    Cited by:

    1. David Bardey & Jean‐Charles Rochet, 2010. "Competition Among Health Plans: A Two‐Sided Market Approach," Journal of Economics & Management Strategy, Wiley Blackwell, vol. 19(2), pages 435-451, June.
    2. P. Bontems & N. Turpin & Gilles Rotillon, 2003. "Acceptibility constraints and self-selecting agri-environmental policies," Thema Working Papers 2003-14, THEMA (Théorie Economique, Modélisation et Applications), CY Cergy-Paris University, ESSEC and CNRS.
    3. Philippe Bontems & Gilles Rotillon & Nadine Turpin, 2008. "Acceptable reforms of agri-environmental policies," Revue d'économie politique, Dalloz, vol. 118(6), pages 847-883.
    4. Calub, Renz Adrian, 2014. "Physician quality and payment schemes: A theoretical and empirical analysis," MPRA Paper 66038, University Library of Munich, Germany.

    More about this item

    JEL classification:

    • D73 - Microeconomics - - Analysis of Collective Decision-Making - - - Bureaucracy; Administrative Processes in Public Organizations; Corruption
    • I11 - Health, Education, and Welfare - - Health - - - Analysis of Health Care Markets
    • L10 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - General

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