Health economists and policymakers have long recognized that capitation gives insurers incentive to manipulate their offerings to deter the sick and attract the healthy. The shadow-price ap- proach to measuring such selection incentives was pioneered by Frank, Glazer and McGuire (2000). We...

Many important dimensions of quality health care are difficult to observe, monitor, and motivate. This paper examines how competition among providers interacts with payment system incentives when the allocation of provider effort among multiple such dimensions or ‘tasks’ is noncontractible....

We examine the role that buyers play in helping vendors uncover productivity-enhancing labor management innovations. We report on a buyer-directed factory-based program targeting intestinal parasites and anemia in seven Bangalore apparel factories. Raw pre-post productivity comparisons were...

Recent empirical studies point to the need for a model of bilateral market power between health plans and provider organizations. We develop such a model and use it to analyze the impact on cost and access of alternative contractual relationships between plans and providers. The plans...

Health care policymakers in many countries seek to use incentives and competition to spur efficiency. One important challenge is to mitigate the sacrifice of social solidarity that such reforms entail, because strong incentives promote risk selection. This paper argues conceptually and presents...

We develop a model of public-private hospital competition un- der regulated prices, recognizing that hospitals are multi-service Þrms and that equilibria depend on the interactions of patients, hospital administrators, and physicians. We then use data from China to calibrate a simulation model...

Payment incentives have significant consequences for the equity and efficiency of a health care system, and have recently come to the fore in health policy reforms. This paper first discusses the economic rationale for apparent international convergence toward payment systems with mixed demand...

In many developing countries, the majority of physicians employed in government clinics also have a private practice. We develop a simple model to show that allowing dual practice helps low-income governments retain skilled physicians to assure patient access. If dual-practice providers...