Tommy Andersson

Professor

Multiple Pricing for Personal Assistance Services

Author

Tommy Andersson
Lina Maria Ellegård
Andreea Enache
Albin Erlanson
Prakriti Thami

Summary, in English

This paper provides a general theoretical framework that captures the essential features of
a Swedish reform where private and public health care providers serve patients with certain
functional impairments. Because providers receive a fixed hourly compensation for their
services (identical across patient types) and only private providers can reject service requests
from patients, private providers avoid the costliest patients, resulting in a monetary deficit
for public providers. To partially overcome this problem, a multiple pricing (reimbursement)
scheme is proposed and its solution is characterized. The results suggest that there are some
fundamental trade-offs, e.g., between the goals of containing costs and restricting choices
for patients, but that the suggested pricing scheme may substantially reduce the deficits for
public providers without affecting the total budget set by the central government.

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