Managing imperfect competition by pay for performance and reference pricing

I study a managed health service market where differentiated providers compete for consumers by choosing multiple service qualities, and where copayments that consumers pay and payments that providers receive for services are set by a payer. The optimal regulation scheme is two-sided. On the demand side, it justifies and clarifies value-based reference pricing. On the supply side, it prescribes pay for performance when consumers misperceive service benefits or providers have intrinsic quality incentives. The optimal bonuses are expressed in terms of demand elasticities, service technology, and provider characteristics. However, pay for performance may not outperform prospective payment when consumers are rational and providers are profit maximizing, or when one of the service qualities is not contractible

Provider Performance Reports and Consumer Welfare

A provider's performance report consists of his service average outcome and volume. The two variables depend on the provider's private quality type and current demand, but he can raise his average outcome by dumping vulnerable consumers. Prospective consumers infer providers' qualities from their reports. Performance reporting drives some providers to dump consumers when competition is intense, but it may not reveal providers' qualities when their average quality is high. Statistical adjustment aiming at making reports independent of consumer characteristics can lead to more dumping, less informative reports, or both. There is more dumping when volume information is withheld and less dumping when ratings information is coarse

Information Disclosure and the Equivalence of Prospective Payment and Cost Reimbursement

A health care provider chooses unobservable service-quality and cost-reduction efforts. The efforts produce quality and cost efficiency. An insurer observes quality and cost, and chooses how to disclose this information to consumers. The insurer also decides how to pay the provider. In prospective payment, the insurer fully discloses quality, and sets a prospective payment price. In cost reimbursement, the insurer discloses a value index, a weighted average of quality and cost efficiency, and pays a margin above cost. The first-best quality and cost efforts can be implemented by prospective payment and by cost reimbursement. Cost reimbursement with value index eliminates dumping and cream skimming. Prospective payment with quality index eliminates cream skimming

Incentives for motivated experts in a partnership

A Principal has a set of projects, each having different benefit potentials, and each requiring a basic technology from one of two experts and time inputs from both experts. Experts enjoy motivation utilities from production, but have private information of their own motivation preferences and project potentials. Technology and time-input choices are experts’ private decisions. Experts form a Partnership, which designs a sharing rule and a gatekeeping protocol to determine experts’ priority on technology choice. Using a linear cost-share contract that lets experts make minimum profits, the Principal implements the first best by delegating all decisions to the Partnership.Accepted manuscrip

Predicting dementia diagnosis from cognitive footprints in electronic health records: a case-control study protocol

INTRODUCTION: Dementia is a group of disabling disorders that can be devastating for persons living with it and for their families. Data-informed decision-making strategies to identify individuals at high risk of dementia are essential to facilitate large-scale prevention and early intervention. This population-based case-control study aims to develop and validate a clinical algorithm for predicting dementia diagnosis, based on the cognitive footprint in personal and medical history. METHODS AND ANALYSIS: We will use territory-wide electronic health records from the Clinical Data Analysis and Reporting System (CDARS) in Hong Kong between 1 January 2001 and 31 December 2018. All individuals who were at least 65 years old by the end of 2018 will be identified from CDARS. A random sample of control individuals who did not receive any diagnosis of dementia will be matched with those who did receive such a diagnosis by age, gender and index date with 1:1 ratio. Exposure to potential protective/risk factors will be included in both conventional logistic regression and machine-learning models. Established risk factors of interest will include diabetes mellitus, midlife hypertension, midlife obesity, depression, head injuries and low education. Exploratory risk factors will include vascular disease, infectious disease and medication. The prediction accuracy of several state-of-the-art machine-learning algorithms will be compared. ETHICS AND DISSEMINATION: This study was approved by Institutional Review Board of The University of Hong Kong/Hospital Authority Hong Kong West Cluster (UW 18-225). Patients' records are anonymised to protect privacy. Study results will be disseminated through peer-reviewed publications. Codes of the resulted dementia risk prediction algorithm will be made publicly available at the website of the Tools to Inform Policy: Chinese Communities' Action in Response to Dementia project (https://www.tip-card.hku.hk/)

Conglomerate Multi-Fidelity Gaussian Process Modeling, with Application to Heavy-Ion Collisions

In an era where scientific experimentation is often costly, multi-fidelity emulation provides a powerful tool for predictive scientific computing. While there has been notable work on multi-fidelity modeling, existing models do not incorporate an important ``conglomerate'' property of multi-fidelity simulators, where the accuracies of different simulator components (modeling separate physics) are controlled by different fidelity parameters. Such conglomerate simulators are widely encountered in complex nuclear physics and astrophysics applications. We thus propose a new CONglomerate multi-FIdelity Gaussian process (CONFIG) model, which embeds this conglomerate structure within a novel non-stationary covariance function. We show that the proposed CONFIG model can capture prior knowledge on the numerical convergence of conglomerate simulators, which allows for cost-efficient emulation of multi-fidelity systems. We demonstrate the improved predictive performance of CONFIG over state-of-the-art models in a suite of numerical experiments and two applications, the first for emulation of cantilever beam deflection and the second for emulating the evolution of the quark-gluon plasma, which was theorized to have filled the Universe shortly after the Big Bang

Innovation, financial development and economic growth in Eurozone countries

Using a panel vector auto-regressive model, we study interactions between innovation, financial development and economic growth in 18 Eurozone countries between 1961 and 2013. We focus on whether causality runs between these variables both ways, one way, the other way or not at all. Our empirical results show that development of the financial sector and enhanced innovative capacity in the Eurozone contribute to longterm economic growth in the countries in the region.http://www.tandfonline.com/loi/rael202018-05-31hb2016Financial Managemen

Causal nexus between economic growth, banking sector development, stock market development, and other macroeconomic variables : the case of ASEAN countries

This paper examines the relationship between banking sector development, stock market development, economic growth, and four other macroeconomic variables in ASEAN countries for the period 1961–2012. Using principal component analysis for the construction of the development indices and a panel vector auto-regressive model for testing the Granger causalities, this study finds the presence of both unidirectional and bidirectional causality links between these variables. The study contributes to understanding the importance of the interrelationship between the variables and combines the different strands of the literature. It also contributes to the literature by focusing on a group of countries that have not been studied before. One particular policy recommendation is to make the banking sector more accessible for those country's inhabitants that do not have bank accounts. Another policy recommendation is to nurture stock market development, which will facilitate the increased raising of capital for investment purposes to enhance economic growth.http:// www.elsevier.com/locate/rfehb2016Financial Managemen

The dynamics of banking sector and stock market maturity and the performance of Asian economies : time series evidence

PURPOSE – The purpose of this paper is to examine the nature of causal relations between banking sector maturity, stock market maturity, and four aspects of performance and operation of the economy: economic growth, inflation, openness in trade, and the degree of government involvement in the economy. DESIGN/METHODOLOGY/APPROACH – The authors look for possible links between the variables by conducting panel cointegration and causality tests, using a large sample of Asian countries over the period 1960-2011. Novel panel data estimation methods allow for robust estimates, using both variation between countries and variation over time. FINDINGS – The study identifies interesting causal links among the variables deriving uniquely from our innovations. In particular, The paper finds that for all regions considered, banking sector maturity and stock market maturity are causally linked, sometimes in both directions. Furthermore, stock market maturity may lead to economic growth, both directly and indirectly through indicators such as inflation and trade openness. The findings also support the notion that economic growth affects the maturity of the stock market in most regions. PRACTICAL IMPLICATIONS – The results lend support to the notion that a mature financial sector is a key contributor to generating economic growth. Furthermore, economic growth itself has the potential to bring about maturity in the financial sector. ORIGINALITY/VALUE – The paper uses sophisticated principal-component analysis, panel cointegration, and Granger causality tests, methods not used in this literature before. The method was applied to recent data pertaining to 35 Asian countries – a group of countries that has previously not been adopted in this literature.http://www.emeraldinsight.com/1026-4116.htmhttp://www.emeraldinsight.com/loi/jeashj201