TY - JOUR
T1 - "Selling the store" to the HMO: A life insurance contract for optimal provision of care
AU - Burkey, Mark L
PY - 2008/1/1
Y1 - 2008/1/1
N2 - Health care is a credence good: consumers must consult an expert who diagnoses and repairs a problem. Since effort is difficult to monitor, fraud or low effort are possible. This paper proposes "selling the store" to an HMO via a life insurance contract. The HMO becomes a residual claimant, avoiding payment as long as the patient is alive. This contract forces the HMO to provide a specified level of care, even when a patient does not know his initial level of health. This contract solves several problems associated with fraudulent diagnosis and low effort, but is not a panacea. © 2006 Elsevier B.V. All rights reserved.
AB - Health care is a credence good: consumers must consult an expert who diagnoses and repairs a problem. Since effort is difficult to monitor, fraud or low effort are possible. This paper proposes "selling the store" to an HMO via a life insurance contract. The HMO becomes a residual claimant, avoiding payment as long as the patient is alive. This contract forces the HMO to provide a specified level of care, even when a patient does not know his initial level of health. This contract solves several problems associated with fraudulent diagnosis and low effort, but is not a panacea. © 2006 Elsevier B.V. All rights reserved.
KW - Credence good
KW - Health care
KW - HMO
KW - Insurance
UR - https://www.scopus.com/inward/record.uri?partnerID=HzOxMe3b&scp=37549062675&origin=inward
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U2 - 10.1016/j.jebo.2005.10.002
DO - 10.1016/j.jebo.2005.10.002
M3 - Article
SN - 0167-2681
VL - 65
SP - 118
EP - 132
JO - Journal of Economic Behavior and Organization
JF - Journal of Economic Behavior and Organization
IS - 1
ER -
