Provider Altruism in Incentives Contracts: Medicare’s Quality Race

The paper analyzes the impact of provider altruism and motivation on out ­comes pay-for-performance reimbursement in healthcare, where a fixed price contract quantity is supplemented with relative performance quail­ty. We develop theoretical model which forecasts crowding most alt­ruistic providers. Using example Medicare’s nationwide natural experiment quality (the data for 3000 acute care hospitals 2004-2017, incentives implemented since 2013), we conduct an empirical test predictions. assume that hete­rogeneous across values each hospital are higher measures strongly associated patient’s benefit. analysis employs dynamic panel estimations to account «habit-formation» exclude pre-reform post-reform «regression-to-the-mean» effects by modeling time-dependent long-term mean as function characteristics. focus highest-quality discover deterioration measures, may be linked benefit (communication patients medical personnel ability receive help promptly). It interpreted illustration fact incentive contracts altruistic providers healthcare market.