Managed care and shadow price.
A managed-care company must decide on allocating resources of many services to many groups of enrollees. The profit-maximizing allocation rule is characterized. For each group, the marginal utilities across all services are equalized. The equilibrium has an enrollee group shadow price interpretation. The equilibrium spending allocation can be implemented by letting utilitarian physicians decide on service spending on an enrollee group subject to a budget for the group.
Ma
Ching-To A
CT
Department of Economics, Boston University, Boston 02215, USA. ma@bu.edu
D015276:Health Care Rationing; D008329:Managed Care Programs / Q000191:economics*; D014481:United States