The impact of medical complications on optimal hospital payment

François Maréchal () and Lionel Thomas ()
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François Maréchal: CRESE - Centre de REcherches sur les Stratégies Economiques (UR 3190) - UFC - Université de Franche-Comté - UBFC - Université Bourgogne Franche-Comté [COMUE]
Lionel Thomas: CRESE - Centre de REcherches sur les Stratégies Economiques (UR 3190) - UFC - Université de Franche-Comté - UBFC - Université Bourgogne Franche-Comté [COMUE]

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Abstract: Abstract This paper studies the optimal payment policy offered by a regulator to a partially altruistic hospital when the latter privately observes the severity of illness of patients and chooses a hidden quality that influences the probability of medical complications occurring. We analyze how the level of altruism of the hospital affects the conditions under which the payment, for a given diagnosis‐related group, should be refined according to the severity of illness and the occurrence of complications.

Date: 2021
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Published in Journal of Public Economic Theory, 2021, 23 (6), pp.1144-1173. ⟨10.1111/jpet.12530⟩

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Persistent link: https://EconPapers.repec.org/RePEc:hal:journl:hal-00448803

DOI: 10.1111/jpet.12530

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