A shirking theory of referrals

Damien Eldridge ()

No 2013.01, Working Papers from School of Economics, La Trobe University

Abstract: The health care industry in some countries displays a gated structure. Rather than approaching a specialist directly, a patient will first seek a referral from a general practitioner. We provide one possible explanation for such an industry structure. If the outcome of treatment depends on the effort exerted by the treating specialist, then a market failure might occur. By aggregating many patients, general practitioners can sometimes create an artificial long- run relationship between a patient and a specialist that otherwise would have a short-run relationship. Such an artificial long-run relationship reduces the incidence of shirking on the part of the specialist.

Keywords: Gatekeepers; Reputation; Moral Hazard; Referral (search for similar items in EconPapers)
JEL-codes: C73 D82 I11 (search for similar items in EconPapers)
Pages: 31 pages
Date: 2013
New Economics Papers: this item is included in nep-com, nep-cta, nep-cwa, nep-gth and nep-hea
Note: ISSN-1837-2198
References: View references in EconPapers View complete reference list from CitEc
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Related works:
Working Paper: A Shirking Theory of Referrals (2007)
Working Paper: A Shirking Theory of Referrals (2007)
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