Optimal medical investment and insurance system: revenues, costs and benefits

Chunyuan Chen, Zih Yan Lin, Ya Chiao Hsieh

Research output: Contribution to journalArticle


This paper analyses the optimal choice of medical investment and design of health insurance system in an interactive medical context with the utility-maximising patient, the net-revenue-maximising physician and the insurer pursuing the patient’s benefits and a balance between revenues and costs. The feasibility of cost reduction or benefit improving is addressed. With positive payments to the physician, cost reduction or benefit improving is obtainable through a reduction in the social loss by restraining overinvestment in medical capital goods. A fully prospective payment system would be a cost- minimising payment system but not definitely a benefit-improving system.

Original languageEnglish
Pages (from-to)23-41
Number of pages19
JournalInternational Journal of Revenue Management
Issue number1
Publication statusPublished - 2008 Jan 1


All Science Journal Classification (ASJC) codes

  • Business and International Management
  • Finance
  • Economics and Econometrics
  • Strategy and Management

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