The Ghanaian National Health Insurance Scheme pays providers according to the fee for service payment scheme, a method of payment that is likely to encourage inducement of care. The goal of this paper is to test for the presence of supplier induced demand among patients who received care in private, for profit, hospitals accredited to provide care to insured patients. An instrumental variable P...

We consider a single buyer who wishes to outsource a fixed demand for a manufactured good or service at a fixed price to a set of potential suppliers. We examine the value of competition as a mechanism for the buyer to elicit service quality from the suppliers. We compare two approaches the buyer could use to orchestrate this competition: (1) a Supplier-Allocation (SA) approach, which allocates...

This paper investigates the effect of information updating on the members of a two-stage supply chain in the presence of spot market. The supplier decides the contract price. New information becomes available as time progresses. The manufacturer updates his belief on demand and/or spot price and subsequently decides the contract quantity. The demand and spot price are correlated. Thus, the new ...

BACKGROUND The development of hospital service areas (HSAs) using small area analysis has been useful in examining variation in medical and surgical care; however, the techniques of small area analysis are underdeveloped in understanding psychiatric admission rates. We sought to develop these techniques in order to understand the relationship between psychiatric bed supply and admission rates i...

This paper studies supply chain demand variability in a model with one supplier and N retailers that face stochastic demand. Retailers implement scheduled ordering policies: Orders occur at fixed intervals and are equal to some multiple of a fixed batch size. A method is presented that exactly evaluates costs. Previous research demonstrates that the supplier’s demand variance declines as the re...

Empirical studies of supplier-induced demand in health care have mostly concentrated on the analysis of physician behaviour. In this article, the focus is on the economic determinants of physiotherapist behaviour in The Netherlands. It is shown that relative prices work as strong incentives to alter the mix of services supplied, conform to the model of revenue maximization under a production co...

We estimate the degree of supplier-induced demand for newborn treatment by exploiting changes in reimbursement arising from the introduction of the partial prospective payment system (PPS) in Japan. Under the partial PPS, neonatal intensive care unit (NICU) utilization became relatively more profitable than other procedures, since it was excluded from prospective payments. We find that hospital...

We consider a supplier and a customer operating under a service agreement that requires the supplier to cover the random customer demand with high probability. To fulfill the service agreement, the supplier carries a certain amount of safety stock. The customer has some bearing on its demand variability, possibly through activities such as acquiring advance demand information, employing more so...