Physician reimbursement and technology adoption.
This study analyses the incentives of health care providers to adopt new technologies in a world with ex-post moral hazard. It is shown that in a second best efficient world with respect to insurance coverage, a linear remuneration scheme implements the adoption of second best efficient technologies only in special cases. Under a (third best) standard coinsurance contract, the adequate reimbursement rule is characterised depending on the characteristics of the technology and on patients' demand elasticities with respect to monetary and non-monetary costs. A shift from fee-for-service to capitation is likely to display undesirable incentives for very severe illnesses by inducing a reduction in the technically feasible level of healing or an increase in non-monetary costs of treatment.
Selder
Astrid
A
Department of Economics, University of Munich, Ludwigstr. 28 VG, D-80539 Munich, Germany. astrid.selder@lrz.uni-muenchen.de
D001292:Attitude to Computers; D004059:Diffusion of Innovation; D005858:Germany; D006801:Humans; D013677:Medical Laboratory Science; D010820:Physicians / Q000191:economics* / Q000523:psychology; D012051:Reimbursement Mechanisms / Q000458:organization & administration*