The world spends a significant and increasing share of its resources on health care. The debates on the models of health care financing and the methods of payment for the physician continue all over the world. Nevertheless, there is still no consensus on the ideal choice of financing mechanisms. This thesis aims at contributing to the debates on the health care financing and health service policy. Chapter one examines the optimal non-linear compensation rule of physicians under pay-for-performance, fee-for-service and capitation in the presence of both adverse selection and moral hazard on the supply side. We found that when moral hazard is the only problem, fee-for-service can only lead to the substitution of treatment quantity to physician’s effort, which is inefficient. Consequently, fee-for-service payments should not be used in this case. However, when moral hazard is combined with the adverse selection issue, an efficient screening requires a continued use of fee-for-service for the lower productivity physicians and less pay-for-performance. The design of the use of fee-for-service effectively improves screening. We provide an argument for the criticism on the shortcomings of fee-for-service. More importantly, we also provide a rationale for the continued use of fee-for-service payment even though the serious problems with fee-for-service have been widely acknowledged. Chapter two analyzes the three-party contracting problem among the payer, the patient and the physician when the patient and the physician may collude to exploit mutually beneficial opportunities. Under the hypothesis that side transfer is ruled out, we analyze the mechanism design problem when the physician and the patient submit the claim to the payer through a reporting game. We also derive the optimal insurance payment scheme for the patient and the physician. The insurance payment scheme which is (weak) collusion-proof is such that it is sufficient that one of them tells the truth ; but the payer’s trade-offs are different when he chooses different manners of splitting incentives between the patient and the physician. Moreover, we show that if the payer is able to ask the two parties to report the diagnosis sequentially, the advantage of the veto power of the second agent allows the payer to achieve the first best outcome. My secondary field is Development Economics. The third chapter examines whether migration crowds out informal risk-sharing contracts and leads to less consumption insurance for households in Thai villages. For the theoretical motivation, our idea is that migration may be used as a cash-in-advance contract between the household and the child. The household invests upfront in exchange for future state-contingent remittance which changes the income process of the household. For the estimation, We use the panel from Townsend Thai Annual Surveys (1997-2010). The hypothesis of no selection bias is rejected at within village insurance market level, which supports our conjecture that migration changes the risk-sharing status of households within village. After the bias are corrected, our results show that migration crowds out informal risk-sharing within village and even leads to less consumption insurance for households in Thai villages.