This seminar will investigate the role of information in health care organizations and its effects on health care performance.

Abstract

Each of two experts may provide service for a client. In one state, one expert has a lower service cost than the other expert; in another state, the opposite is true. Each expert may also exert effort to acquire information about a client's service cost. Effort and acquired signals are private information. In a market, an expert may refer the client to the other for a fee. In equilibrium, only one expert exerts effort and refers successfully, yet effort and referral are inefficient. If experts form an organizations, they can transfer costs among themselves. Within such an organization, an expert who refers bears the service cost incurred by the referred expert. Referral efficiency can be restored at the expense of cost-reduction incentives. An organization has a lower expected cost if and only if referral efficiency is more important than cost incentives.

Speaker: Simona Grassi (University of Lausanne) 

This event is part of the Health Economics and Policy Seminar Series 2015-16, convened by Prof Winnie Yip and Dr Osea Giuntella