Cost incentives for doctors: A double-edged sword
Research output: Contribution to journal › Journal article › Research › peer-review
If doctors take the costs of treatment into account when prescribing medication, their objectives differ from their patients' objectives because the patients are insured. This misalignment of interests hampers communication between patient and doctor. Giving cost incentives to doctors increases welfare if (i) the doctor's examination technology is sufficiently good or (ii) (marginal) costs of treatment are high enough. If the planner can costlessly choose the extent to which doctors take costs into account, he will opt for less than 100%. Optimal health care systems should implement different degrees of cost incentives depending on type of disease and/or doctor.
Original language | English |
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Journal | European Economic Review |
Volume | 61 |
Pages (from-to) | 43-58 |
ISSN | 0014-2921 |
DOIs | |
Publication status | Published - Jul 2013 |
Bibliographical note
JEL classification: D82; D83; I10
ID: 45102311