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Case Study 13

Nursing

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Case Study 13.1

• Who is the principal and who is the agent in this scenario?
• How the agent is better informed than the principal?
• How do poorly aligned incentives affect the system and individual administrators?
• What could the system do to convince nursing home administrators to improve safety?
• Are financial incentives a part of the action plan? Why or why not?
• How could nursing home administrators signal to the company that they are improving safety?

Case Study 13.2 

• Why would standardization reduce costs? How could it improve quality?
• How could the hospital reward physicians for helping standardize prostheses?
• How would this reward system help align incentives?
• Are any strategies less likely to cause problems with the Medicare Inspector General?