Non-profit firms in healthcare - Why are non-profit firms so popular? - Explanation 2: contract failure
3 important questions on Non-profit firms in healthcare - Why are non-profit firms so popular? - Explanation 2: contract failure
What were the reasons for principal-agent problems in hospitals?
- Asymmetric information
- conflict of interests
What four things do complete contracts require?
- All available information and all future contingencies are included in the contract.
- all observable information is verifiable by a third party
- Compensation is based on measured performance
- Principal has to devise an incentive scheme to motivate agents to act in their interest.
Are complete contracts feasible in hospitals? Why yes/no?
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