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| Author: | Glazer, J. McGuire, T. |
| Title: | Payer competition and cost shifting in health care |
| Journal: | Journal of Economics & Management Strategy
1994 : SPRING, VOL. 3:1, p. 71-92 |
| Index terms: | MEDICAL CARE COMPETITION COSTS |
| Language: | eng |
| Abstract: | This paper studies a model in which two payers contract with one hospital. True costs per patient are not a possible basis for payment, and contracts can only be written on the basis of allocated cost. Payers choose a contract that is fully prospective or fully based on cost allocation, or a payment scheme that would give some weight to each of these two. The authors characterize the payers' equilibrium contracts and show how in equilibrium hospital input decisions are distorted by the payers' incentives to engage in cost shifting. |
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