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Diagnostics and treatment: On the division of labor between primary care physicians and specialists

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  • Griebenow, Malte
  • Kifmann, Mathias

Abstract

This paper analyzes the referral processes between a gatekeeping primary-care physician (PCP) and a specialist. Specialists provide superior treatment for some patients but are more costly than PCPs. Agency problems arise because diagnostic signals are private information of the physicians. Welfare optimizing contracts can call for a markup either to the PCP for treatingpatients without referral or to the specialist for referring patients back to the PCP. If the benefit of specialist treatment is uncertain, small markups for the specialist enhance welfare compared to a cost-based fee-for-service contract. Additionally, we consider how waiting costs for referrals affect our main results.

Suggested Citation

  • Griebenow, Malte & Kifmann, Mathias, 2021. "Diagnostics and treatment: On the division of labor between primary care physicians and specialists," hche Research Papers 25, University of Hamburg, Hamburg Center for Health Economics (hche).
    • Handle: RePEc:zbw:hcherp:202125
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    References listed on IDEAS

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    Cited by:

    1. Milstein, Ricarda & Schreyögg, Jonas, 2022. "Activity-based funding based on diagnosis-related groups: The end of an era? A review of payment reforms in the inpatient sector in ten high-income countries," hche Research Papers 28, University of Hamburg, Hamburg Center for Health Economics (hche).
    2. Kaarboe, Oddvar & Siciliani, Luigi, 2023. "Contracts for primary and secondary care physicians and equity-efficiency trade-offs," Journal of Health Economics, Elsevier, vol. 87(C).

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