What is Private Information

It is increasingly recognized that, by introducing healthcare information systems, it may be possible to improve healthcare delivery. Yet, insufficient attention has been paid, in the context of the introduction and implementation of new technologies, to examine the issues concerning the reduction of the astonishing variations in medical (and surgical) practices across seemingly similar areas. This article studies the causes of the differences in healthcare practices by examining the agency relationship where the patients delegate decision making to the physicians. To do this, it first presents the consequences of two main informational issues: the asymmetric information, and the imperfect information. Under such informational inadequacies, practitioners could not act in the best interests of their patients, and unnecessary and inappropriate cares could appear. Second, this article derives from such informational problems the necessity of information and coordination systems to ensure a better healthcare delivery.