Principal-Agent Relationship in Medical Care: Eliciting Patients Preferences in Patient-Doctor Relationship

As implicated in principal-agent theory, responding to patients needs and preferences should be the fundamental objective and be taken into consideration in designing of a health care financing system. This study attempts to characterize the patient s preferences for information, thus the utility junction, during clinical consultation. An empirical study was carried out in the context of a Malaysian health care setting involving 108 and 50 diabetic patients from a public and a private hospital respectively. Results from the analysis showed that diabetic patients from both the hospitals gave priority to the quality rather than the quantity of information transferred. Socia-economic characteristics a/the patient were introduced into the model in the form a/interaction terms explained how preferences varied across patients