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Health Insurance, Treatment Plan, and Delegation to Altruistic Physician

Ting Liu () and Ching-to Ma ()

No 12-08, Department of Economics Working Papers from Stony Brook University, Department of Economics

Abstract: We study delegating a consumer's treatment plan decisions to an altruistic physician. The physician?s degree of altruism is his private information. The consumer's illness severity will be learned by the physician, and also will become his private information. Treatments are discrete choices, and can be combined to form treatment plans. We distinguish between two commitment regimes. In the first, the physician can commit to treatment decisions at the time a payment contract is accepted. In the second, the physician cannot commit to treatment decisions at that time, and will wait until he learns about the patient's illness to do so. In the commitment game, the first best is implemented by a single payment contract to all types of altruistic physician. In the noncommitment game, the first best is not achieved All but the most altruistic physician earn positive profits, and treatment decisions are distorted from the first best.

Keywords: Optimal contract; delegation; altruistic physician; commitment. (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-cta, nep-hea and nep-ias
Date: 2012-08
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http://www.stonybrook.edu/economics/research/paper ... l_treatment_JEBO.pdf First version, 2012 (application/pdf)

Related works:
Journal Article: Health insurance, treatment plan, and delegation to altruistic physician (2013) Downloads
Working Paper: Health Insurance, Treatment Plan, and Delegation to Altruistic Physician (2011)
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