Agency, Managed Care and Financial-Risk Sharing in General Medical Practice

Which techniques can and do third-party agents apply within their relationships with general practitioners in order to reduce the agency problems within the patient-physician relationship? We gave an overview of techniques that are used by third parties rather commonly – that is to say, in some health-care systems. In health care (the use of) such a set of techniques is usually designated as ‘managed care’. We argued that the managed-care techniques fit in the triptych of agency theory remarkably well. The three successive phases that comprise this triptych (selecting, controlling and monitoring the agent) form an iterative process, which we labelled the managed-care cycle. Hence from the perspective of agency theory, managed care can be viewed as (the cyclical use of) a set of techniques by which the third-party agent may attempt to influence the behaviour of the agent in a way that is beneficial to the patient.