Risk-bearing moral hazard

CLAIMS-REPORTING AND RISK-BEARING MORAL HAZARD... 

However, our tests for claims-reporting and risk-bearing moral hazard may suffer from specification bias the functional form may not... 

Risk-bearing moral hazard changes with HRM practices, and... 

Claims Reporting and Risk Bearing Moral Hazard in... 

Butler, R. Worrall, J. 1991, Claims reporting and risk bearing moral hazard in workers compensation . Journal of Risk and Insurance, vol. 58, no. 2, pp. 191-204... 

The provider is reimbursed for each individual service performed (diagnostics, surgery, tests etc.) for every patient. This is often called retrospective cost-based payment, as providers submit bills to payers for incurred costs, only after completing the relevant services. Note that the payer bears full risk as it must pay for all service, whether or not necessary. The temptation for charging for unnecessary services (not verifiable) has been discussed earlier it increases the costs of healthcare. The patient usually does not object to additional and/or expensive services as he/she is not asked to pay for it directly. The built-in moral hazard and patients acquiescence make this method of payment unsustainable. It has some advantages, however. It can be easily developed and implemented, and it more accurately reflects the work actually done and the efforts expended. 

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