Beiträge zur Jahrestagung des Vereins für Socialpolitik 2017: Alternative Geld- und Finanzarchitekturen - Session: Health Economics II B11-V2
In health service markets, patients often rely on the advice of their general practitioner (GP) to decide which treatment best fits their needs. Hospitals, in turn, influence GPs referral decisions through kickbacks. We formulate a model with competitive heterogeneous GPs who differ in the degree to which they internalize the disutility that their patients suffer from inappropriate treatments. We prove that a separable equilibrium with referring and not referring GPs exist.