Information Asymmetry, Insurance, and the Decision to HospitalizeAke Blomqvist and Pierre Thomas Leger () Departmental Working Papers from National University of Singapore, Department of Economics Abstract: We analyze the effects of various kinds of demand- and supply-side incentives in the context of a model in which patients and doctors must decide not only on an aggregate quantity of health services to use in treating various kinds of illness, but also have a choice between different kinds of providers (in particular, outpatient services rendered by primary-care physicians or inpatient services provided by hospital-based specialists). We consider well -informed patients’ choices of provider when they have conventional insurance so they only pay part of the cost of their health services, as well as the equilibrium strategies of doctors and patients when there is patient-provider asymmetry; in the latter case we also analyze a managed-care insurance setup under which doctors are paid by capitation. We find that under certain plausible conditions, second-best optimal managed-care plans dominate second -best optimal conventional plans that rely on cost control through demand-side cost sharing. Keywords: Primary Care; Specialty Care; Hospitalization; Insurance; HMOs; Capitation; Asymmetric Information. (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: http://EconPapers.repec.org/RePEc:nus:nusewp:wp0305 Access Statistics for this paper More papers in Departmental Working Papers from National University of Singapore, Department of Economics |
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