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Paying Providers

In: Health Economics

Author

Listed:
  • Peter Zweifel

    (University of Zurich)

  • Friedrich Breyer

    (University of Konstanz)

  • Mathias Kifmann

    (University of Augsburg)

Abstract

One of the guiding themes of this book is the optimal design of incentives for patients and providers. In Chapter 6, we concentrated on the demand side. In case of moral hazard, we found that complete insurance coverage encourages excessive use of health care services by the insured. For this reason, demand-side cost sharing in the form of copayments will usually be optimal. In this chapter, we turn to the supply side to examine optimal incentives for providers of health care services who are prone to moral hazard as well. After all, they are guaranteed reimbursement regardless of cost by an insurer paying fee-for-service. Incentives to control costs under such a payment system are weak, calling for some kind of supply-side cost sharing.

Suggested Citation

  • Peter Zweifel & Friedrich Breyer & Mathias Kifmann, 2009. "Paying Providers," Springer Books, in: Health Economics, chapter 10, pages 331-377, Springer.
    • Handle: RePEc:spr:sprchp:978-3-540-68540-1_10
    DOI: 10.1007/978-3-540-68540-1_10
    as

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