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Incentive for Gatekeepers and Their Demand Inducement: An Empirical Analysis of Care Managers in the Japanese Long-Term Care Insurance

  • Shinya Sugawara

    (Faculty of Economics, The University of Tokyo)

  • Jiro Nakamura

    (Advanced Research Institute for the Sciences and Humanities, Nihon University)

   This study analyzes incentives and supplier-induced demand of care man- agers, middlemen between consumers and service providers in the Japanese social insurance program for long-term care. Care managers can be considered as pure gatekeepers in that their function is limited to referral to specialists and they themselves do not provide care. Rewards for care managers are rendered by capitation, which is considered as a cost-effective payment mechanism for insurers. However, many care managers actually work for rms that also operate service provision sectors. The service providers are rewarded by the fee-for-service payment and have motivation to induce excess consumer demand. Thus, the violation of neutrality of care managers might yield an nancial burden on social insurance. In this study, we empirically analyze the behavior of care managers by checking whether they cause supplier-induced demand. Our estimation results detect the existence of care manager-induced demand for care managers who work for rms that jointly operate in service provision sectors; however, those who operate only care management do not induce demand. Based on the estimation results, we conduct a quantitative analysis and show that the care manager-induced produces a considerable nancial burden on social insurance. Keyword: Elderly care; Gatekeepers; Incentive; Supplier-induced demand; Japanese Long-Term Care Insurance program; Care managers

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Paper provided by CIRJE, Faculty of Economics, University of Tokyo in its series CIRJE F-Series with number CIRJE-F-916.

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Length: 26 pages
Date of creation: Jan 2014
Date of revision:
Handle: RePEc:tky:fseres:2014cf916
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  1. Shinya Sugawara, 2013. "Firm-driven Management for Longevity Risk: Analysis of Lump-sum Forward Payments in Japanese Nursing Homes," CIRJE F-Series CIRJE-F-908, CIRJE, Faculty of Economics, University of Tokyo.
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  7. James M. Malcomson, 2004. "Health Service Gatekeepers," RAND Journal of Economics, The RAND Corporation, vol. 35(2), pages 401-421, Summer.
  8. Grytten, Jostein & Sorensen, Rune, 2001. "Type of contract and supplier-induced demand for primary physicians in Norway," Journal of Health Economics, Elsevier, vol. 20(3), pages 379-393, May.
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  11. Noguchi, Haruko & Shimizutani, Satoshi, 2009. "Supplier Density and At-home Care Use in Japan: Evidence from a Micro-level Survey on Long Term Care Receivers," PIE/CIS Discussion Paper 434, Center for Intergenerational Studies, Institute of Economic Research, Hitotsubashi University.
  12. Marie Allard & Izabela Jelovac & Pierre-Thomas Léger, 2011. "Treatment and referral decisions under different physician payment mechanisms," Post-Print halshs-00650933, HAL.
  13. Dranove, David & Wehner, Paul, 1994. "Physician-induced demand for childbirths," Journal of Health Economics, Elsevier, vol. 13(1), pages 61-73, March.
  14. Blomqvist, Ake, 1991. "The doctor as double agent: Information asymmetry, health insurance, and medical care," Journal of Health Economics, Elsevier, vol. 10(4), pages 411-432.
  15. Shinya Sugawara & Jiro Nakamura, 2013. "Is Elderly Care Socialized in Japan? Analyzing the Effects of the 2006 Amendment to the LTCI on the Female Labor Supply," CIRJE F-Series CIRJE-F-888, CIRJE, Faculty of Economics, University of Tokyo.
  16. Croxson, B. & Propper, C. & Perkins, A., 2001. "Do doctors respond to financial incentives? UK family doctors and the GP fundholder scheme," Journal of Public Economics, Elsevier, vol. 79(2), pages 375-398, February.
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