The production of health does not only depend on the medical services supplied by the physician but is also influenced by the patient's compliance. A model of medical treatment is presented in which both the actions of physician and patient are modeled as a productive input. The analysis...

The use of prospective payment system in health care has mixed evidences as concerns its effectiveness. On the one side it avoid the problem of misreporting cost, but has the downside effect that, if hospitals might choose which patients to treat, competition might become unfair and the whole...