Financing medical specialist services in The Netherlands: Welfare implications of imperfect agency
Since 1995 the financing scheme for medical specialist services in the Netherlands has moved from a fee-for-service scheme to a capitation scheme. This paper analyzes the economic and welfare effects of this policy change. The paper adopts a numerical model that integrates demand and supply considerations and that recognizes the potential roles of moral hazard and supplier-induced demand. The paper finds that the shift in financing regime has been welfare-reducing. The policy change induced medical specialists to lower the supply of the health services which was already lower than optimal before the policy reform.
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- Kees Folmer & Johnny Stevens & Frank Van Tulder & Ed Westerhout, 1997. "Towards an economic model of the Dutch health care sector," Health Economics, John Wiley & Sons, Ltd., vol. 6(4), pages 351-363.
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- Feldman, Roger & Dowd, Bryan, 1991. "A New Estimate of the Welfare Loss of Excess Health Insurance," American Economic Review, American Economic Association, vol. 81(1), pages 297-301, March.
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- Ellis, Randall P. & McGuire, Thomas G., 1990. "Optimal payment systems for health services," Journal of Health Economics, Elsevier, vol. 9(4), pages 375-396, December.
- Rosett, Richard N & Huang, Lien-fu, 1973. "The Effect of Health Insurance on the Demand for Medical Care," Journal of Political Economy, University of Chicago Press, vol. 81(2), pages 281-305, Part I, M.
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