Article dans une série de papiers de travail :
(University of Rosario (Bogota, Colombia) and Toulouse School of Economics), Helmuth Cremer
(Toulouse School of Economics (IDEI and GREMAQ-CNRS)) et Jean-Marie Lozachmeur
(Toulouse School of Economics (IDEI and GREMAQ-CNRS)), « Doctors' remuneration schemes and hospital competition in two-sided markets with common network externalities »
, TSE Working Paper
, n°11-250, février 2011, révision juillet 2011.
This paper uses a two-sided market model of hospital competition to study the implications of different remunerations schemes on the physicians’ side. The two-sided market approach is characterized by the concept of common network externality (CNE) introduced by Bardey et al. (2010). This type of externality occurs when occurs when both sides value, possibly with different intensities, the same network externality. We explicitly introduce effort exerted by doctors. By increasing the number of medical acts (which involves a costly e¤ort) the doctor can increase the quality of service offered to patients (over and above the level implied by the CNE). We
first consider pure salary, capitation or fee-for-service schemes. Then, we study schemes that mix fee-for-service with either salary or capitation payments. We show that salary schemes (either pure or in combination with fee-for-service) are more patient friendly than (pure or mixed) capitations schemes. This comparison is exactly reversed on the providers’ side. Quite surprisingly, patients always loose when a fee-for-service scheme is introduced (pure of mixed). This is true even though the fee-for-service is the only way to induce the providers to exert e¤ort and it holds whatever the patients’ valuation of this effort. In other words, the increase in quality brought about by the fee-for-service is more than compensated by the increase in fees faced by patients.
D41 : Perfect Competition
L11 : Production, Pricing, and Market Structure; Size Distribution of Firms (Concentration, Product Differentiation, Entry and Exit)
L12 : Monopoly; Monopolization Strategies