Tradeoffs from Integrating Diagnosis and Treatment in Markets for Health Care

摘要

Anyone who has consulted a doctor, plumber, or auto mechanic has experienced the tradeoffs in consulting a single expert to both diagnose and treat a problem in the presence of asymmetric information. On one hand, integrated diagnosticians—those who also sell treatments—may have the incentive to give advice that is not in the buyer's best interests. As the theoretical models in Curtis R. Taylor (1995) and Asher Wolinsky (1993) point out, because the buyer has imperfect information on the scope of the problem (if he did not, he would not have needed to consult a diagnostician in the first place), the diagnostician inevitably has the incentive to recommend treatments that are more profitable, even if they are more costly, of lower quality, or less appropriate. On the other hand, joint production of diagnosis and treatment may be more efficient. The diagnostician may have better information about how to treat the problem than he could (or would) provide to an independent third party. Or, the diagnostician may be able to treat the problem himself less expensively or more effectively ("half the cost is opening the engine block").