An Evidence-Based Incentive System for Medicare's End-Stage Renal Disease Program

Recent legislations directed Medicare to revamp its decades-old system for reimbursing dialysis treatments, with focus on the risk adjustment of payments and on the transition toward a pay-for-compliance system. To design an optimal payment system that incorporates these features, we develop an empirical method to estimate the structural parameters of the principal--agent model underlying Medicare's dialysis payment system. We use the model and...