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Asymmetric information and pooling contracts in hospital sector

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Date
2014
Dewey
Economie financière
Sujet
Hospital regulation; patient severity; non-responsiveness; altruism; adverse selection
JEL code
I1; L3; D8
Journal issue
JITE : Journal of Institutional and Theoretical Economics
Volume
170
Number
2
Publication date
2014
Article pages
365-386
DOI
http://dx.doi.org/10.1628/093245614X13826128096866
URI
https://basepub.dauphine.fr/handle/123456789/5993
Collections
  • LEDa : Publications
Metadata
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Author
Mougeot, Michel
Naegelen, Florence
Type
Article accepté pour publication ou publié
Abstract (EN)
Most of regulators in health care systems use pooling contracts such that payment do not depend on the level of severity. This policy is motivated by concerns about the moral hazard problem. In this paper, we show that it can be optimal when patient severity is private information because of the non-responsiveness phenomenon. We show in which cases the hospital may be non responsive to the regulator objective under adverse selection. We exhibit necessary conditions under which pooling contracts are optimal and we characterize these mechanisms when the hospital is self-interested and perfectly altruistic. In the first case, the fixed payment is equal to the cost of treating the patient with the highest severity whereas it is equal to the mean value of the treatment cost in the second one.

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