Module 7-10

Question 1

Principle Agent Problem

Answer 1

when an organization (principle) wants to accomplish something but must contract another firm (agent) to achieve outcome. Problem comes from motivating the agent or physicians considering asymmetric information and uncertainty

Question 2

Prospective payment, who bares risk, and what type of efficiency is encouraged

Answer 2

funding is set before services are provided, risk is borne by provided, encourages cost and technical efficiency

Question 3

Retrospective payment, who bares risk, what is the outcome

Answer 3

payment is determined after all services have been provided, risk is borne by payer, encourages inefficient overprovision, but will maximize volume of services

Question 4

Fee for service and efficiencies, and the but

Answer 4

total payment depends on the number of services provided, encourages technical and cost effective efficiency, but incentive to over provide

Question 5

Capitation and efficiencies

Answer 5

physicians receive a fixed specified payment per for every person under there roster, encourages tech and cost efficiency

Question 6

Salary

Answer 6

fixed predetermined sum of money for a given period

Question 7

What are the 4 hospital funding schemes

Answer 7

Global Budget, Activity based funding, bundling payment, pay for performance