Multiple Payers in Health Care : A Framework for Assessment
The starting point of the debate about the pros and cons of multipayer systems is the suspicion that in many health care systems, consumers do not get sufficient value for money. This contribution argues that one cause may be a non-optimal choice o...
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| Format: | Working Paper |
| Language: | English en_US |
| Published: |
World Bank, Washington, DC
2013
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| Online Access: | http://documents.worldbank.org/curated/en/2004/09/5643877/multiple-payers-health-care-framework-assessment http://hdl.handle.net/10986/13704 |
| Summary: | The starting point of the debate about
the pros and cons of multipayer systems is the suspicion
that in many health care systems, consumers do not get
sufficient value for money. This contribution argues that
one cause may be a non-optimal choice of payment systems.
Optimal payment of health care providers importantly depends
on the amount of information available to the (prospective)
patient. If patients have full information about both the
effort exerted and the effectiveness of the service
provider, the conventional fee-for-service payment is
optimal from their point of view. If patients cannot observe
true effort exerted while providers are reasonably
homogenous with respect to effectiveness, the optimal
payment function consists of a fixed payment and a bonus for
especially favorable outcomes in terms of health. If the
patient in addition does not know whether a given health
care provider effective or ineffective, a special
informational rent designed to attract the unrecognized
favorable type is appropriate. Now, a government is unlikely
to come up with payment systems that closely conform to this
conditionality, typically preferring single-payer systems
that allow service providers to exercise monopsony power and
thus keep health care expenditure low. Multiple-payer
systems containing competitive health insurers may have an
advantage in designing payment systems in a way that
maintains or reinforces provider incentives to do the right
thing for their patients, resulting in more value for money. |
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