TY - JOUR
T1 - Cost incentives for doctors
T2 - A double-edged sword
AU - Schottmüller, Christoph
N1 - JEL classification: D82; D83; I10
PY - 2013/7
Y1 - 2013/7
N2 - If doctors take the costs of treatment into account when prescribing medication, their objectives differ from their patients' objectives because the patients are insured. This misalignment of interests hampers communication between patient and doctor. Giving cost incentives to doctors increases welfare if (i) the doctor's examination technology is sufficiently good or (ii) (marginal) costs of treatment are high enough. If the planner can costlessly choose the extent to which doctors take costs into account, he will opt for less than 100%. Optimal health care systems should implement different degrees of cost incentives depending on type of disease and/or doctor.
AB - If doctors take the costs of treatment into account when prescribing medication, their objectives differ from their patients' objectives because the patients are insured. This misalignment of interests hampers communication between patient and doctor. Giving cost incentives to doctors increases welfare if (i) the doctor's examination technology is sufficiently good or (ii) (marginal) costs of treatment are high enough. If the planner can costlessly choose the extent to which doctors take costs into account, he will opt for less than 100%. Optimal health care systems should implement different degrees of cost incentives depending on type of disease and/or doctor.
U2 - 10.1016/j.euroecorev.2013.03.001
DO - 10.1016/j.euroecorev.2013.03.001
M3 - Journal article
SN - 0014-2921
VL - 61
SP - 43
EP - 58
JO - European Economic Review
JF - European Economic Review
ER -