Wirtschaftswissenschaftliche Diskussionspapiere // Ernst-Moritz-Arndt-Universität Greifswald, Rechts- und Staatswissenschaftliche Fakultät 07/1999
The relationship between physician and patient has been discussed intensively in the literature. Nevertheless, they neglect the fact that the production of health not only depends on the medical services supplied by the physician but is also influenced by the patient's compliance. We present a model of medical treatment in which both the actions of physician and patient are modelled as a productive input. The consequences of a mutual asymmetric information about these inputs result in lower activity levels. Only in the case of strategic substitutes one level might be above the first-best level. The implementation of a coinsurance on the demand side raises the compliance of the patient. The influence on the amount of medical services depends on the strategic interaction, i.e. whether we face the case of strategic independence, strategic complements or strategic substitutes.