Contracts for Health Services: Quality Versus Excess Capacity
This paper studies the effects of non-contractability of investment on the choices made by a health authority and the hospital with which it contracts for the provision of a specific service. We deal with a situation where the parties must write a short-term contract, that is, where they are prevented from signing a contract before making their investment choices. For this reason inefficiency emerges: the service quality chosen by the hospital is too low, and the health authority relies too much on outside providers.
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|Date of creation:||Aug 1998|
|Contact details of provider:|| Postal: Bonn Graduate School of Economics, University of Bonn, Adenauerallee 24 - 26, 53113 Bonn, Germany|
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