Dynamic, incentive-compatible contracting for health services

Arbeitspapier

This paper aims to characterise a dynamic, incentive-compatible contract for the provision of health services, allowing for both moral hazard and adverse selection. Patients' severity changes over time following a stochastic process and is private information of the provider. We characterise the optimal dynamic contract and show that it is made up of two components: a timeinvariant payment, which depends on the structural characteristics of the provider, and a timevarying component, which is affected by both patient and hospital characteristics. To illustrate the characteristics of the dynamic contract and compare it with a more standard static contract, we provide a numerical exercise calibrated with data from hip replacement hospitalisations in Italy.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: Working Paper ; No. 016.2023

Classification and Topics

• Classification: Wirtschaft ; Publicly Provided Private Goods ; Health: Government Policy; Regulation; Public Health ; Asymmetric and Private Information; Mechanism Design
• Subject: hospital payments ; dynamic mechanism design ; DRG ; two-part tariffs ; adverse selection ; moral hazard

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Levaggi, Rosella ; Moretto, Michele ; Pertile, Paolo
• Event: Veröffentlichung
• (who): Fondazione Eni Enrico Mattei (FEEM)
• (where): Milano
• (when): 2023

Further information

• Handle: http://hdl.handle.net/10419/281123
• Last update: 10.03.2025, 11:43 AM CET