Agency relationship, conflict of interests, and asymmetry of information have been examined and discussed in detail in more classic economic systems and corporate governance. In this paper we attempt to apply these concepts to healthcare delivery system to understand its nature and dynamics. Considering the vital role of health insurance, the nature of agency cost in various forms of insurance is examined. Finally, we suggest strategies for handling and containment of this phenomenon in health systems with any forms of insurance.

Keywords: Agency cost, Conflict of interests, Delivery of health care, Health insurance, Moral hazard

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