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Background: With DRG payments, hospitals can game the system by ’upcoding’ true patient’s severity of illness. This … paper takes into account that upcoding can be performed by the chief physician and hospital management, with the extent of …-agent mechanism, the distortion due to upcoding is shown to accumulate, whereas in the bargaining case it is avoided at the level of …
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We analyzed the impact of social networks on general practitioners (GPs) referral behavior based on administrative panel data from 2,684,273 referrals to resident specialists made between 1998 and 2007. To construct estimated social networks, we used information on the doctors place and time of...
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Incentive contracts for gatekeepers who control patient access to specialist medical services provide too weak incentives to investigate cost further when expected cost of treatment is greater than benefit. Making gatekeepers residual claimants with a fixed fee from which treat-ment costs must...
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To align employees’ interests with the firm’s goals, employers often use performance-based pay, but designing such a compensation plan is challenging because performance is typically multifaceted. For example, a sales employee should be incentivized to sell the company’s product, but a...
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Empirical studies of the principal-agent relationship find that extrinsic incentives work in many instances, linking rewards to performance increases effort, but that they can also backfire, reducing effort. Intrinsic motivation, the internal drive to work to master a skill or to improve one's...
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