SFB 303 Discussion Paper No. A - 578
Author: Bös, Dieter, and Gianni De Fraja
Title: Contracts for Health Services: Quality Versus Excess Capacity
Abstract: This paper studies the effects of non-contractability
of investment on the choices made by a health authority
and the hospital with which it contracts for the provision
of a specific service. We deal with a situation where the
parties must write a short-term contract, that is, where
they are prevented from signing a contract before making
their investment choices. For this reason inefficiency
emerges: the service quality chosen by the hospital
is too low, and the health authority relies too much on
outside providers.
Keywords: Health Services, Incomplete Contracts
JEL-Classification-Number: I11, I18
Creation-Date: August 1998
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