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 Consumer Incentives

Prior to engaging in this discussion, please read Chapter 12 in the text and review any relevant Instructor Guidance. It is suggested that you review the recommended articles to glean any helpful information. Imagine that you run a nursing home facility in your area. Analyze and comment on the role public policy has in the economic aspect of running this type of health services center. Compare and contrast the economic challenges and incentives this type of health care model presents. What are some of the ways in which you could inform or signal potential consumers that your nursing home is of high quality? Evaluate the social-cultural issues that influence the consumers of this type of health service. Which of your proposed methods are most apt to be reliable signals that significantly communicate to consumers so they are able to make more informed decisions?


Required Resources

Required Text

  1. Lee, R. H. (2015). Economics for health care managers (3rd ed.). Chicago, IL: Health Care Administration Press. Retrieved from
    1. Chapter 13: Asymmetric Information and Incentives 


  1. Daniels, E. B., & Dickson, T.C. (1990). Assessing the feasibility, Performance of geriatric clinics. Healthcare Financial Management, 44(2), 30-34. Retrieved from the ProQuest database
    • This article will be utilized as reference in conjunction with your feasibility study assignments.
  2. Korda, H., & Eldridge, G. N. (2011). Payment incentives and integrated care delivery: Levers for health system reform and cost containment. Inquiry 48(4), 277-287. doi:10.5034/inquiryjrnl_48.04.01
    • This article reviews evidence about integrated care delivery, payment methods, and financial incentives to improve value in health care purchasing. It also addresses how these approaches can be used to advance health system change.
  3. Rice, T. (1997). Physician payment policies: Impacts and implications. Annual Review of Public Health, 18(1), 549. Retrieved from the EBSCOhost database.
    • This article reviews recent changes in physician payment policies, examines evidence on their impacts, and discusses their implications for researchers and policy makers. It also develops a conceptual framework to help explore the economic incentives inherent in different physician payment schemes  

Recommended Resources


  1. Arrow, K. J. (1963). Uncertainly and the welfare of economics of medical care (Links to an external site.)Links to an external site.. The American Economic Review, 53(5), 941-973. Retrieved from
    • This article is a sentinel paper discussing the issue of uncertainly and economic provisions in health care.
  2. Davis, K., & Guterman, S. (2007). Rewarding excellence and efficiency in Medicare payments. Milbank Quarterly, 85(3), 449-468. doi:10.1111/j.1468-0009.2007.00495.x
    • The full-text version of this article can be accessed through the EBSCOhost database in the Ashford University Library.
  3. Greenwald, L. M. (2000). Medicare risk-adjusted capitation payments: From research to implementation. Health Care Financing Review, 21(3), 1-5. Retrieved from the EBSCOhost database.
    • The article introduces the reader to the concept of risk adjustment and its implications on payment models in health care.

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