SFB 303 Discussion Paper No. A - 549

Author: De Fraja, Gianni
Title: Contracts for Health Care and Asymmetric Information
Abstract: The paper presents a general model of contracting for a specific health service. The benefit of this service differs across patients; a purchaser (NHS, insurer) offers a contract to providers (hospitals, GP's), under the constraint of limited information about the provider's costs; the contract specifies payment as a function of the number of cases treated. A number of features of the optimal contract are derived. Some of these are surprising: for example, under plausible conditions, the price per case increases with the efficiency of the provider.
Keywords: Contracts, health services, regulation, NHS
JEL-Classification-Number: I18, L51
Creation-Date: April 1997
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