Information Disclosure and the Equivalence of Prospective Payment and Cost Reimbursement
Ching-to Ma () and
Henry Y. Mak ()
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Henry Y. Mak: Indiana University-Purdue University Indianapolis
No 2013-018, Boston University - Department of Economics - Working Papers Series from Boston University - Department of Economics
A health care provider chooses medical service quality and cost-reduction eÂ§ort. Both choices are non- contractible. An insurer observes both quality and cost eÂ§ort, and may credibly disclose them to consumers. In prospective payment, the insurer fully discloses care quality, and sets a prospective payment price. In cost reimbursement, the insurer discloses a value index, a weighted average of quality and cost eÂ§ort, and pays a margin above cost. The OÌˆrst-best quality and cost eÂ§ort can be implemented by prospective payment and by cost reimbursement.
Keywords: information disclosure; prospective payment; cost reimbursement; fee for service; quality; cost reduction (search for similar items in EconPapers)
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http://www.bu.edu/econ/files/2014/05/Ma-Informatio ... ce-November-2013.pdf First version, 2013 (application/pdf)
Journal Article: Information disclosure and the equivalence of prospective payment and cost reimbursement (2015)
Working Paper: Information Disclosure and the Equivalence of Prospective Payment and Cost Reimbursement (2012)
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