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Managed care and shadow price
Author(s) -
Ma Chingto A.
Publication year - 2004
Publication title -
health economics
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.55
H-Index - 109
eISSN - 1099-1050
pISSN - 1057-9230
DOI - 10.1002/hec.817
Subject(s) - shadow price , managed care , economics , microeconomics , shadow (psychology) , profit (economics) , marginal cost , group (periodic table) , service (business) , business , actuarial science , health care , marketing , psychology , mathematical optimization , chemistry , mathematics , organic chemistry , psychotherapist , economic growth
A managed‐care company must decide on allocating resources of many services to many groups of enrollees. The profit‐maximizing allocation rule is characterized. For each group, the marginal utilities across all services are equalized. The equilibrium has an enrollee group shadow price interpretation. The equilibrium spending allocation can be implemented by letting utilitarian physicians decide on service spending on an enrollee group subject to a budget for the group. Copyright © 2003 John Wiley & Sons, Ltd.