Financing medical specialist services in The Netherlands: Welfare implications of imperfect agency

Ed Westerhout, C. Folmer

Research output: Contribution to journalArticleScientificpeer-review

1 Citation (Scopus)

Abstract

Since 1995 the financing scheme for medical specialist services in the Netherlands has moved from a fee-for-service scheme to a capitation scheme. This paper analyzes the economic and welfare effects of this policy change. The paper adopts a numerical model that integrates demand and supply considerations and that recognizes the potential roles of moral hazard and supplier-induced demand. The paper finds that the shift in financing regime has been welfare-reducing. The policy change induced medical specialists to lower the supply of the health services which was already lower than optimal before the policy reform.
Original languageEnglish
Pages (from-to)946-958
JournalEconomic Modelling
Volume25
Issue number5
DOIs
Publication statusPublished - 2008
Externally publishedYes

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