No Crowding Out despite Kickbacks: Competition between Gatekeeping GPs

Stefan Felder and Erwin Amann

VfS Annual Conference 2017 (Vienna): Alternative Structures for Money and Banking from Verein für Socialpolitik / German Economic Association

Abstract: In health service markets, patients often rely on the advice of their general practitioner (GP) to decide which treatment best fits their needs. Hospitals, in turn, influence GPs referral decisions through kickbacks. We formulate a model with competitive heterogeneous GPs who differ in the degree to which they internalize the disutility that their patients suffer from inappropriate treatments. We prove that a separable equilibrium with referring and not referring GPs exist.

JEL-codes: D47 D82 I11 I18 L50 (search for similar items in EconPapers)
Date: 2017
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