A BEJEAP Topics article.

Abstract

This paper analyses the incentive properties of prospective payment systems for hospital contracts, a key feature in many health systems’ reforms. Building on current literature, the model explicitly allows for the existence of waiting time, modelled as adversely affecting patients’ utility and therefore reducing social welfare. The model shows that rewarding hospitals for their demand leads to the first best solution, identified with respect to the relevant quality and quantity variables. The additional separate payment of a price per case is instead required when the social cost of waiting is introduced alongside the private costs.

Submitted: March 17, 2005 · Accepted: May 20, 2005 · Published: September 22, 2005

Originally published in Topics in Economic Analysis & Policy.

Recommended Citation

Ferrari, Dr. Alessandra (2005) "The Payment of Hospital Services: a Waiting Lists Model," Topics in Economic Analysis & Policy: Vol. 5 : Iss. 1, Article 18.
Available at: http://www.bepress.com/bejeap/topics/vol5/iss1/art18