Agency theory: a framework for analyzing physician services
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Updated: Oct 19, 2026

Using Visual and Narrative Methods to Achieve Fair Process in Clinical Care
Published on: February 16, 2011
1Fairleigh Dickinson University, Madison, NJ, USA.
Abstract:
The principles of agency theory and how the theory can be used as a framework for the design of physician selection procedures and of physician compensation contracts and control systems for the regulation of physician practices are discussed. The theory is used to show why third party payers who wish to control expenditure for high quality health care may be better off if they enter into salary contracts rather than fee-for-service or capitation contracts with individual physicians.
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