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date: 15 May 2021

Abstract and Keywords

The purpose of this article is to consider the implications of the theoretical and empirical literature on physician behavior and the payment for the design of a payment system to finance a medical home. It states that an analysis of physician behavior implies primary care physicians should be paid by a combination of an enrollment-based prospective payment, and fees related to procedures. As in many areas of health economics designing such a system involves issues of moral hazard and adverse selection. This article is concerned with the moral hazard component: designing a payment system to convey appropriate incentives to supply care. It makes some preliminary comments on the implications for dealing with selection in the upfront enrollment payment associated with the medical home.

Keywords: payment system, primary care, health economics, physician behavior, medical home

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