Law & Health Weekly
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Health Maintenance Organizations
Data on health maintenance organizations described by M.L. Burkey et al
March 29th, 2008
"Health care is a credence good: consumers must consult an expert who diagnoses and repairs a problem. Since effort is difficult to monitor, fraud or low effort are possible," scientists in the United States report. "This paper proposes ''selling the store'' to an HMO via a life insurance contract. The HMO becomes a residual claimant, avoiding payment as long as the patient is alive. This contract forces the HMO to provide a specified level of care, even when a patient does not know his initial level of health," wrote M.L. Burkey and colleagues. The researchers concluded: "This contract solves several problems associated with fraudulent diagnosis and...
Source: Law & Health Weekly (2008-03-29)
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