Abstract

http://ssrn.com/abstract=1095592
 


 



Principal Agency Theory and Health Care Utilization


Helen Schneider


affiliation not provided to SSRN

Alan D. Mathios


Cornell University - Department of Policy Analysis & Management (PAM)

July 2006

Economic Inquiry, Vol. 44, Issue 3, pp. 429-441, 2006

Abstract:     
This article uses a principal agent framework to examine the role that monitoring costs faced by an insurer have on health care utilization. We compare hospital lengths of stay for fee-for-service and capitated patients in low and high monitoring cost situations. Monitoring costs associated with a particular procedure are assumed to be high when there is large variation across patients in hospital lengths of stay. The empirical results indicate that differences in utilization between fee-for-service and capitated patients increase as monitoring costs increase. However, we do not find that fee-for-service reimbursement is used less in the difficult to monitor situations. (JEL I1)

Accepted Paper Series


Not Available For Download

Date posted: February 29, 2008  

Suggested Citation

Schneider, Helen and Mathios, Alan D., Principal Agency Theory and Health Care Utilization (July 2006). Economic Inquiry, Vol. 44, Issue 3, pp. 429-441, 2006. Available at SSRN: http://ssrn.com/abstract=1095592 or http://dx.doi.org/10.1093/ei/cbj025

Contact Information

Helen Schneider
affiliation not provided to SSRN
Alan D. Mathios
Cornell University - Department of Policy Analysis & Management (PAM) ( email )
120 Martha Van Rensselaer Hall
Ithaca, NY 14853
United States
607-255-2589 (Phone)
607-255-0799 (Fax)
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