Incentive Compatible Reimbursement Schemes for Physicians

Winand Emons

No 7659, CEPR Discussion Papers from C.E.P.R. Discussion Papers

Abstract: We consider physicians with fixed capacity levels. If a physician's capacity exceeds demand, she may have an incentive to overtreat, i.e., she may provide unnecessary treatments to use up idle capacity. By contrast, with excess demand she may undertreat, i.e., she may not provide necessary treatments since other activities are financially more attractive. We first show that simple fee-for-service reimbursement schemes do not provide proper incentives. If insurers use, however, fee-for-service schemes with quantity restrictions, they solve the fraudulent physician problem.

Keywords: Credence goods; Demand inducement; Expert services; Incentives; Insurance; Medical doctors (search for similar items in EconPapers)
JEL-codes: D82 I11 (search for similar items in EconPapers)
Date: 2010-01
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Related works:
Journal Article: Incentive-Compatible Reimbursement Schemes for Physicians (2013)
Working Paper: Incentive Compatible Reimbursement Schemes for Physicians (2010)
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