What is Agency Relationship

Reducing medical costs is one of the major policy questions. A well understanding of this issue requires specific insight into some domains. The three main points which must be clarified relate to: (1) the nature of the costs (production costs and transaction costs), (2) the nature of new healthcare technologies (the biotechnology and biomedical engineering vs. the e-healthcare system, the face-to-face communications between the primary care physicians or other providers and the patients vs. the non face-to-face communications), and (3) the nature of information (which can be asymmetric, incomplete, or imperfect). This article studies what differences there are when considerations about informational issues and types of medicine are taken into account in the modern health economy characterized by the generation and the implementation of new healthcare technologies. To do this, this article first clarifies and presents some concepts in the framework of the health economy. Then, from these issues, it discusses the cost containment in the current case of the development and adoption of new technologies, and contrasts the opinions and perspectives.