Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/114013
Authors: 
Kantarevic, Jasmin
Kralj, Boris
Year of Publication: 
2015
Series/Report no.: 
IZA Discussion Papers 9142
Abstract: 
We develop a stylized principal-agent model with moral hazard and adverse selection to provide a unified framework for understanding some of the most salient features of the recent physician payment reform in Ontario and its impact on physician behavior. These features include: (1) physicians can choose a payment contract from a menu that includes an enhanced fee-for-service contract and a blended capitation contract; (2) the capitation rate is higher and the cost-reimbursement rate is lower in the blended capitation contract; (3) physicians sort selectively into the contracts based on their preferences; and (4) physicians in the blended capitation model provide fewer services than physicians in the enhanced fee-for-service model.
Subjects: 
physician remuneration
moral hazard
adverse selection
Ontario
JEL: 
I10
I12
I18
Document Type: 
Working Paper

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