TY  - JOUR
AU  - Rizzo,John A.
AU  - Sindelar,Jody L.
TI  - Optimal Regulation of Multiply-Regulated Industries: The Case of        Physician Services
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 4822
PY  - 1994
Y2  - August 1994
UR  - http://www.nber.org/papers/w4822
L1  - http://www.nber.org/papers/w4822.pdf
N1  - Author contact info:
Jody L. Sindelar
Yale School of Public Health
Yale University School of Medicine
60 College Street, P.O. Box 208034
New Haven, CT 06520-8034
Tel: 203/785-5287
Fax: 203/785-6287
E-Mail: jody.sindelar@yale.edu
AB  - This paper models the physician services market which is regulated by two government agencies.  The Health Care Financing Administration (HCFA) sets Medicare physician fees through the newly implemented Resource Based Relative Value Scale (RBRVS).  The Agency for Health Care Policy and Research (AHCPR) sets practice guidelines for quality. We analyze welfare losses which occur when agencies fail to coordinate their regulatory activities.  Specifically, we consider the welfare impacts for cost, quality, practice characteristics, and quantity of care. Perceived ills in the market for physician services, such as excessive expenditures and overly intensive treatment, may be traced to coordination failures.  Thus, even if physicians were to act as perfect agents for their patients, and even if moral hazard were to be eliminated, coordination failure could cause the critical problems associated with the physician services market to persist.  Although the model is applied to the market for physician services, it can be readily generalized to other settings involving multiple regulators.
ER  -