The ambulatory physician payment system in the German Social Health Insurance (SHI) offers incentives to reduce practice activity at the end of a billing period. Most services within a period are reimbursed at full cost only up to a certain threshold. Furthermore, capitated payments make...

The production of health does not only depend on the medical services supplied by the physician but is also influenced by the patient's compliance. A model of medical treatment is presented in which both the actions of physician and patient are modeled as a productive input. The analysis...