Financing medical specialist services in The Netherlands: Welfare implications of imperfect agency

Cees Folmer and Ed Westerhout

Economic Modelling, 2008, vol. 25, issue 5, 946-958

Abstract: Since 1995 the financing scheme for medical specialist services in the Netherlands has moved from a fee-for-service scheme to a capitation scheme. This paper analyzes the economic and welfare effects of this policy change. The paper adopts a numerical model that integrates demand and supply considerations and that recognizes the potential roles of moral hazard and supplier-induced demand. The paper finds that the shift in financing regime has been welfare-reducing. The policy change induced medical specialists to lower the supply of the health services which was already lower than optimal before the policy reform.

Date: 2008
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Persistent link: https://EconPapers.repec.org/RePEc:eee:ecmode:v:25:y:2008:i:5:p:946-958

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