Optimal payment systems for health services.

  title={Optimal payment systems for health services.},
  author={Randall P. Ellis and Thomas G. McGuire},
  journal={Journal of health economics},
  volume={9 4},
Demand-side cost sharing and the supply-side reimbursement system provide two separate instruments that can be used to influence the quantity of health services consumed. For risk-averse consumers, optimal payment systems--pairs of insurance and reimbursement plans--are characterized by conflict rather than consensus between patient and provider about the quantity of treatment. A model of conflict resolution based on bargaining theory is used to represent the outcome when the payment system… CONTINUE READING