Equity and Efficiency in Shared Medical Facilities

Abstract

The success of cooperative ventures is often highly dependent on the rules that govern participants. This is especially true when the stakes are high, as is so often the case when medical devices/facilities are shared and costs are large in terms of both dollars and patient congestion/delay. We argue that one cost sharing mechanism, namely the serial cost sharing rule, enjoys extraordinary equity and incentive properties and is especially well suited for adoption in health care contexts. Moreover, serial cost sharing is the one and only cost sharing rule to be endowed with these powerful equity and incentive features.