McGuire, Alistair 
ORCID: 0000-0002-5367-9841 and Rickman, Neil
(1999)
Regulating providers' reimbursement in a mixed market for health care.
Scottish Journal of Political Economy, 46 (1).
pp. 53-71.
ISSN 0036-9292
Abstract
Hospitals can be reimbursed for their costs in many ways. Several authors have investigated the effects of these reimbursement rules on physician incentives and, therefore, on the quantity of services provided to patients. A form of (linear) cost-sharing tends to emerge as the socially efficient reimbursement policy. We present a model of hospital reimbursement, based on Ellis and McGuire (1986). The new feature is that physicians can supply private health care services to a patient, as well as public sector ones; a common institutional arrangement in many health care systems. We investigate the optimal public sector reimbursement rule given that private market incentives must now be taken into account. Public sector cost-sharing remains socially efficient, but it is generally non-linear: the precise details depend on whether public and private services are substitutes or complements and on the degree of social efficiency achieved in the private sector. Other reimbursement schemes exhibit optimality properties not present in Ellis and McGuire's work.
| Item Type: | Article |
|---|---|
| Official URL: | http://www.wiley.com/bw/journal.asp?ref=0036-9292&... |
| Additional Information: | © 1999 Scottish Economic Society |
| Divisions: | Social Policy LSE Health |
| Subjects: | H Social Sciences > HB Economic Theory |
| Date Deposited: | 03 Feb 2009 16:51 |
| Last Modified: | 01 Nov 2024 05:13 |
| URI: | http://eprints.lse.ac.uk/id/eprint/22436 |
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