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Pay-for-Performance, Reputation, and the Reduction of Costly Overprovision

Author

Listed:
  • Nadja Kairies

    (University of Duisburg-Essen)

Abstract

We investigate the effect of reputational motivation on output in a scenario of overprovision of medical treatment. We assume that physicians differ in their degree of altruism, enjoy being perceived as good but, dislike being perceived as greedy. We show that better reputational motivation unambiguously reduces the costs of healthcare provision and the magnitude of overprovision which in turn raises patient benefits.

Suggested Citation

  • Nadja Kairies, 2015. "Pay-for-Performance, Reputation, and the Reduction of Costly Overprovision," Economics Bulletin, AccessEcon, vol. 35(1), pages 702-715.
  • Handle: RePEc:ebl:ecbull:eb-15-00170
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    References listed on IDEAS

    as
    1. Mark McClellan, 2011. "Reforming Payments to Healthcare Providers: The Key to Slowing Healthcare Cost Growth While Improving Quality?," Journal of Economic Perspectives, American Economic Association, vol. 25(2), pages 69-92, Spring.
    2. Le Grand, Julian, 2003. "Motivation, Agency, and Public Policy: Of Knights and Knaves, Pawns and Queens," OUP Catalogue, Oxford University Press, number 9780199266999.
    3. Eggleston, Karen, 2005. "Multitasking and mixed systems for provider payment," Journal of Health Economics, Elsevier, vol. 24(1), pages 211-223, January.
    4. Siciliani, Luigi, 2009. "Paying for performance and motivation crowding out," Economics Letters, Elsevier, vol. 103(2), pages 68-71, May.
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    More about this item

    Keywords

    altruism; performance; motivation; reputation;
    All these keywords.

    JEL classification:

    • I1 - Health, Education, and Welfare - - Health
    • I0 - Health, Education, and Welfare - - General

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