An economic analysis of payment for health care services: The United States and Switzerland compared

  • Peter Zweifel
  • Ming Tai-Seale


This article seeks to assess whether physician payment reforms in the United States and Switzerland were likely to attain their objectives. We first introduce basic contract theory, with the organizing principle being the degree of information asymmetry between the patient and the health care provider. Depending on the degree of information asymmetry, different forms of payment induce “appropriate” behavior. These theoretical results are then pitted against the RBRVS of the United States to find that a number of its aspects are not optimal. We then turn to Switzerland’s Tarmed and find that it fails to conform with the prescriptions of economic contract theory as well. The article closes with a review of possible reforms that could do away with uniform fee schedules to improve the performance of the health care system.


Principal and agent Optimal payment Payment for health services 

JEL Classification

I18 J33 J38 


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Copyright information

© Springer Science+Business Media, LLC 2009

Authors and Affiliations

  1. 1.Socioeconomic InstituteUniversity of ZurichZurichSwitzerland
  2. 2.Texas A&M UniversityCollege StationUSA

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