Static and Dynamic Efficiency of Irreversible Health Care Investments under Alternative Payment Rules

Rosella Levaggi, Michele Moretto and Paolo Pertile

No 98047, Institutions and Markets Papers from Fondazione Eni Enrico Mattei (FEEM)

Abstract: The paper studies the incentive for providers to invest in new health care technologies under alternative payment systems, when the patients' benefits are uncertain. If the reimbursement by the purchaser includes both a variable (per patient) and a lump-sum component, efficiency can be ensured both in the timing of adoption (dynamic) and the intensity of use of the technology (static). If the second instrument is unavailable, a trade-off may emerge between static and dynamic efficiency. In this context, we also discuss how the regulator could use the control of the level of uncertainty faced by the provider as an instrument to mitigate the trade-off between static and dynamic efficiency. Finally, the model is calibrated to study a specific technology.

Keywords: Health; Economics; and; Policy (search for similar items in EconPapers)
Pages: 34
Date: 2010-11
References: Add references at CitEc
Citations: View citations in EconPapers (3)

Downloads: (external link)
https://ageconsearch.umn.edu/record/98047/files/NDL2010-130.pdf (application/pdf)

Related works:
Journal Article: Static and dynamic efficiency of irreversible health care investments under alternative payment rules (2012)
Working Paper: Static and Dynamic Efficiency of Irreversible Health Care Investments under Alternative Payment Rules (2010)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:ags:feemim:98047

DOI: 10.22004/ag.econ.98047

Access Statistics for this paper

More papers in Institutions and Markets Papers from Fondazione Eni Enrico Mattei (FEEM) Contact information at EDIRC.
Bibliographic data for series maintained by AgEcon Search ().