Empowered patient or empowered physician: an analysis of the importance of the empowered patient in the health delivery system.

This paper develops a simple theoretical model which compares resource allocation in the health care system when physicians are empowered with the decisions taken when patients are empowered. We show that even when there is no asymmetry of information, the institutional arrangement (empowered patient or empowered physician) matter. Ceteris paribus, we find that patients demand more time with physicians when they are empowered (relative to the situation when physicians are empowered), whereas physicians want to spend more time developing their expertise when they are empowered. The reaction of physicians and patients to changes in policy instruments also differs across institutional arrangements. The analysis draws attention to the design of the compensation scheme for physicians, and shows that a non-linear scheme is generally optimal for access to resources if physicians are empowered.