In some countries, including France, patients can choose between consulting a physician working in the regulated sector where, in general, fees are fully covered by health insurance (whether public, private or mixed), or a physician working in the unregulated sector, where a balance billing scheme operates. In the latter, fees might not be fully covered by health insurance, and patients must make out-of-pocket payments. The paper analyses the signalling properties of this mechanism in a context where patients are heterogenous with respect to their propensity to adhere to the prescribed treatment. The model - reveals that a small extra fee allows to obtain a separating equilibrium in which only patients with a high propensity to adhere to the treatment will opt for the unregulated sector and benefit of a higher care effort on behalf of their physician. We also analyse the other equilibria of the game and comment on their welfare properties.
BESANCENOT, D., LAMIRAUD, K. and VRANCEANU, R. (2021). Balance Billing as an Adherence to Treatment Signalling Device. 2103, ESSEC Business School.