Not Available for Download

Principal Agency Theory and Health Care Utilization

Posted: 29 Feb 2008  

Helen Schneider

affiliation not provided to SSRN

Alan D. Mathios

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

Date Written: July 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)

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: https://ssrn.com/abstract=1095592 or http://dx.doi.org/10.1093/ei/cbj025

Helen Schneider

affiliation not provided to SSRN

Alan 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)

Paper statistics

Abstract Views
2,079