Download This PaperA Shirking Theory of Referrals
La Trobe University School of Economics Working Paper No. 1
34 Pages Posted: 1 Mar 2013
There are 2 versions of this paper
A Shirking Theory of Referrals
Date Written: February 8, 2013
Abstract
The health care industry in some countries displays a gated structure. Rather than approaching a specialist directly, a patient will first seek a referral from a general practitioner. We provide one possible explanation for such an industry structure. If the outcome of treatment depends on the effort exerted by the treating specialist, then a market failure might occur. By aggregating many patients, general practitioners can sometimes create an artificial long-run relationship between a patient and a specialist that otherwise would have a short-run relationship. Such an artificial long-run relationship reduces the incidence of shirking on the part of the specialist.
Keywords: Gatekeepers, Reputation, Moral Hazard, Referral
JEL Classification: C73, D82, I11
Suggested Citation: Suggested Citation
Damien Sean Eldridge (Contact Author)
La Trobe University School of Economics ( email )
School of Economics
La Trobe University
Melbourne, Victoria, 3086
Australia
HOME PAGE: http://www.latrobe.edu.au/economics/about/staff/profile?uname=deldridge