Incentives in the Healthcare System

Sisir Debnath, Tarun Jain, Dibya Deepta Mishra. "Incentives in the Healthcare System", 2019
Discipline: Economics
Industry: Health care services,Physicians
Length: 10p
Subjects covered: Asymmetric information, Moral hazard, Economics, Incentives, Motivation, Pay for performance
Publication Date: Jan 25, 2019

This case study illustrates various incentives in the healthcare system using recent research in economics. Healthcare is important but it is difficult to objectively measure it from the perspective of providers, patients and third parties. Hence, incentives are used to motivate behavior in both providers and patients. The design of incentives is an enduring challenge and the case study tries to motivate managers to think through this problem in more detail.

Learning objective:
This case could be taught in courses which introduce incentives in an healthcare context. It could be used to provide examples of how managerial economics could be applied to analyze and drive behavior.