This paper develops a new microanalytic approach to physician medical decision-making treatment setting. Physician medical decision-making is modelled as a two-stage sequential process. In Stage 1, the patient's illness is diagnosed and the health outcomes for all illness-related restoration...

In the United States various forms of managed care have been introduced to control the use of expensive medical services. One of the most prominent involves utilization review of hospital admissions. While reviewing the appropriateness of inpatient treatment is appealing in principle, its...