Physician reimbursement, time-consistency and the quality of care
[Ärztevergütung, Zeitkonsistenz und die Qualität medizinischer Leistungen]
We use a model of horizontal and vertical differentiation to study physicians’ incentives to provide quality in the physician-patient relationship under price regulation. If the price is the only regulatory variable, the social planner cannot implement the first-best policy. Moreover, the second-best policy is time inconsistent. Excess entry and firstbest efficient total quality provision is observed in the game without commitment. Allowing physicians to compete in prices does not solve the commitment problem since the competitive solution coincides with the time consistent outcome. In the median voter equilibrium the time consistency problem is more severe.
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| Length: | |
| Date of creation: | 2002 |
| Handle: | RePEc:zbw:wzbmpg:fsiv0216 |
| Contact details of provider: | Postal: Reichpietschufer 50, 10785 Berlin Phone: +49 (0)30 25491-402 Fax: +49 (0)30 25491-400 Web page: http://www.wzb.eu/ Email: More information through EDIRC
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References listed on IDEAS
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- d'ASPREMONT, Claude & GABSZEWICZ, Jean J. & THISSE, Jacques-François, "undated". "On Hotelling's "Stability in competition"," CORE Discussion Papers RP 385, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
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- Novshek, William, 1980. "Equilibrium in simple spatial (or differentiated product) models," Journal of Economic Theory, Elsevier, vol. 22(2), pages 313-326, April.
- Economides, Nicholas, 1993. "Quality variations in the circular model of variety-differentiated products," Regional Science and Urban Economics, Elsevier, vol. 23(2), pages 235-257, April. Full references (including those not matched with items on IDEAS)
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