Multi‐tasking, quality and pay for performance

Oddvar Kaarboe () and Luigi Siciliani

Health Economics, 2011, vol. 20, issue 2, 225-238

Abstract: We present a model of optimal contracting between a purchaser and a provider of health services when quality has two dimensions. We assume that: (i) the provider is (at least to some extent) altruistic; (ii) one dimension of quality is verifiable (dimension 1) and one dimension is not verifiable (dimension 2); (iii) the two quality dimensions can be either substitutes or complements. Our main result is that setting the price equal to the marginal benefit of the verifiable quality dimension can be optimal even if the two quality dimensions are substitutes. Copyright © 2010 John Wiley & Sons, Ltd.

Date: 2011
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Citations: View citations in EconPapers (33)

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https://doi.org/10.1002/hec.1582

Related works:
Working Paper: Multitasking, Quality and Pay for Performance (2011)
Working Paper: Multitasking, Quality and Pay for Performance (2008)
Working Paper: Multitasking, quality and pay for performance (2008)
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Persistent link: https://EconPapers.repec.org/RePEc:wly:hlthec:v:20:y:2011:i:2:p:225-238

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