LECTURE+5b+-+Alt+views+of+cost-sharing+_+MH

LECTURE+5b+-+Alt+views+of+cost-sharing+_+MH - Lecture 5-b:...

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Lecture 5-b: Alternative Views of Cost-Sharing and Moral Hazard Health Economics 01:220:316 Prof. Derek DeLia, Ph.D.
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Health insurance: Good or bad? Insurance reduces individual risk ==> insurance is good Insurance induces moral hazard ==> insurance is bad
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Welfare loss from excess health insurance Feldman and Dowd (1991) Net welfare loss = $33.4 b to $109.3b (1984 $) “Optimal coinsurance rate” = 45% Implication : More patient cost-sharing Good idea? “Consumer-driven” health plans High deductible/health savings acct
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Systematic Critiques of the Traditional Welfare Loss Model
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What does the demand curve really measure? Tom Rice (1992) P ↑ ==> Q ↓ What does it tell us about value of medical care? Traditional theory ==> when people buy less, they buy less of the “low value” stuff Is it true?
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Effect of cost sharing on use of more/less effective services (% w/at least one episode) Medical effectiveness Adults Children Free care Cost sharing Free care Cost sharing Highly effective
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This note was uploaded on 11/20/2011 for the course ECONOMICS 220:316 taught by Professor Delia during the Spring '11 term at Rutgers.

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LECTURE+5b+-+Alt+views+of+cost-sharing+_+MH - Lecture 5-b:...

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