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Incentive Compatibility and Efficiency in the contractual Insurer-Provider Relationship: Economic Theory and practical Implications: The Case of North Carolina

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  • Schmid, Andreas

Abstract

The paper is concerned with the efficient organization of contractual relationships between health insurers and providers. An introduction to relevant aspects of contract theory is followed by their adaptation to the characteristics of the health care system. The focus lies on an ex ante alignment of incentive structures as well as on an efficient handling of conflicts of interest once a contract has been sealed (ex post). The theory based conclusions are contrasted with the situation in North Carolina, USA. Due to the implemented regulation, this state is well suited to serve as a reference. An excursus to the American health care system provides the reader with the necessary background. A discussion of results completes the paper.

Suggested Citation

  • Schmid, Andreas, 2007. "Incentive Compatibility and Efficiency in the contractual Insurer-Provider Relationship: Economic Theory and practical Implications: The Case of North Carolina," MPRA Paper 23311, University Library of Munich, Germany, revised 2008.
  • Handle: RePEc:pra:mprapa:23311
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    References listed on IDEAS

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    More about this item

    Keywords

    hospital; insurer; health care system; contract theory; USA;

    JEL classification:

    • D86 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Economics of Contract Law
    • I11 - Health, Education, and Welfare - - Health - - - Analysis of Health Care Markets
    • L22 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Firm Organization and Market Structure

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