Optimal medical investment and insurance system: revenues, costs and benefits

Chunyuan Chen, Zih-Yan Lin and Ya-Chiao Hsieh

International Journal of Revenue Management, 2008, vol. 2, issue 1, 23-41

Abstract: This paper analyses the optimal choice of medical investment and design of health insurance system in an interactive medical context with the utility maximising patient, the net-revenue-maximising physician and the insurer pursuing the patient's benefits and a balance between revenues and costs. The feasibility of cost reduction or benefit improving is addressed. With positive payments to the physician, cost reduction or benefit improving is obtainable through a reduction in the social loss by restraining over-investment in medical capital goods. A fully prospective payment system would be a cost-minimising payment system but not definitely a benefit-improving system.

Keywords: benefits; costs; insurers; medical investment; health insurance; patients; physicians; revenue management. (search for similar items in EconPapers)
Date: 2008
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Persistent link: https://EconPapers.repec.org/RePEc:ids:ijrevm:v:2:y:2008:i:1:p:23-41

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