Health Insurance, Moral Hazard, and Managed Care
AbstractIf an illness is not contractible, then even partially insured consumers demand treatment for it when the benefit is less than the cost, a condition known as moral hazard. Traditional health insurance, which controls moral hazard with copayments (demand management), can result in either a deficient or an excessive provision of treatment relative to ideal insurance. In particular, treatment for a low-probability illness is deficient if illness per se has little effect on the consumer's marginal utility of income and if the consumer's price elasticity of expected demand for treatment is large relative to the risk-spreading distortion when these are evaluated at a copayment that brings forth the ideal provision of treatment. Managed care, which controls moral hazard with physician incentives, can either increase or decrease treatment delivery relative to traditional insurance, depending on whether demand management results in deficient or excessive treatment. Copyright (c) 2002 Massachusetts Institute of Technology.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.
Bibliographic InfoArticle provided by Wiley Blackwell in its journal Journal of Economics & Management Strategy.
Volume (Year): 11 (2002)
Issue (Month): 1 (03)
Contact details of provider:
Web page: http://www.kellogg.northwestern.edu/research/journals/JEMS/
Other versions of this item:
You can help add them by filling out this form.
CitEc Project, subscribe to its RSS feed for this item.
- Randall P. Ellis & Ching‐to Albert Ma, 2011.
"Health insurance, cost expectations, and adverse job turnover,"
John Wiley & Sons, Ltd., vol. 20(1), pages 27-44, January.
- Randall P. Ellis & Ching-to Albert Ma, 2007. "Health Insurance, Cost Expectations, and Adverse Job Turnover," Boston University - Department of Economics - Working Papers Series WP2007-034, Boston University - Department of Economics.
- Martin Gaynor & Deborah Haas-Wilson & William B. Vogt, 2000.
"Are Invisible Hands Good Hands? Moral Hazard, Competition, and the Second-Best in Health Care Markets,"
Journal of Political Economy,
University of Chicago Press, vol. 108(5), pages 992-1005, October.
- Martin Gaynor & Deborah Haas-Wilson & William B. Vogt, 1998. "Are Invisible Hands Good Hands? Moral Hazard, Competition, and the Second Best in Health Care Markets," NBER Working Papers 6865, National Bureau of Economic Research, Inc.
- James Malcomson, 2003.
"Health Service Gatekeepers,"
Economics Series Working Papers
169, University of Oxford, Department of Economics.
- Ching-to Albert MA & Ting Liu, 2011.
"Health Insurance, Treatment Plan, and Delegation to Altruistic Physician,"
Boston University - Department of Economics - Working Papers Series
WP2011-022, Boston University - Department of Economics.
- Liu, Ting & Ma, Ching-to Albert, 2013. "Health insurance, treatment plan, and delegation to altruistic physician," Journal of Economic Behavior & Organization, Elsevier, vol. 85(C), pages 79-96.
- Ting Liu & Ching-to Albert Ma, 2012. "Health Insurance, Treatment Plan, and Delegation to Altruistic Physician," Department of Economics Working Papers 12-08, Stony Brook University, Department of Economics.
- Randall P. Ellis & Ching-to Albert Ma, 2005. "Health Insurance, Expectations, and Job Turnover," Boston University - Department of Economics - Working Papers Series WP2005-036, Boston University - Department of Economics.
- Rehn, Eric, 2007. "Public Hospitals - Incentives and Organization," Working Papers 2007:13, Lund University, Department of Economics, revised 01 Apr 2008.
- David Bardey & Jean-Charles Rochet, 2009.
"Competition among health plans: a two-sided market approach,"
DOCUMENTOS DE TRABAJO
005217, UNIVERSIDAD DEL ROSARIO.
- David Bardey & Jean-Charles Rochet, 2010. "Competition Among Health Plans: A Two-Sided Market Approach," Journal of Economics & Management Strategy, Wiley Blackwell, vol. 19(2), pages 435-451, 06.
- Jihong Ding & Minglai Zhu, 2009. "A theoretical investigation of the reformed public health insurance in urban China," Frontiers of Economics in China, Springer, vol. 4(1), pages 1-29, March.
- Bardey, David & Bourgeon, Jean Marc, 2010.
"Health Care Network Formation and Policyholders' Welfare,"
TSE Working Papers
10-183, Toulouse School of Economics (TSE).
- Bardey David & Bourgeon Jean-Marc, 2011. "Health Care Network Formation and Policyholders' Welfare," The B.E. Journal of Economic Analysis & Policy, De Gruyter, vol. 11(2), pages 1-20, January.
- David Bardey & Jean-Marc Bourgeon, 2010. "Healt care network formation and policyholders'welfare," DOCUMENTOS DE TRABAJO 007457, UNIVERSIDAD DEL ROSARIO.
- Amanda E. Kowalski, 2012. "Estimating the Tradeoff Between Risk Protection and Moral Hazard with a Nonlinear Budget Set Model of Health Insurance," NBER Working Papers 18108, National Bureau of Economic Research, Inc.
- Heike Hennig-Schmidt & Reinhard Selten & Daniel Wiesen, 2009.
"How Payment Systems Affect Physicians´ Provision Behaviour – An Experimental Investigation,"
Bonn Econ Discussion Papers
bgse29_2009, University of Bonn, Germany.
- Hennig-Schmidt, Heike & Selten, Reinhard & Wiesen, Daniel, 2011. "How payment systems affect physicians' provision behaviour--An experimental investigation," Journal of Health Economics, Elsevier, vol. 30(4), pages 637-646, July.
- Heike Hennig-Schmidt & Reinhard Selten & Daniel Wiesen, 2011. "How Payment Systems Affect Physicians' Provision Behaviour – An Experimental Investigation," Bonn Econ Discussion Papers bgse03_2011, University of Bonn, Germany.
- Ma, Ching-to Albert, 2004. "Public rationing and private cost incentives," Journal of Public Economics, Elsevier, vol. 88(1-2), pages 333-352, January.
- Michael Hoel, 2005. "Concerns for Equity and the Optimal Co-Payments for Publicly Provided Health Care," CESifo Working Paper Series 1620, CESifo Group Munich.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Wiley-Blackwell Digital Licensing) or (Christopher F. Baum).
If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.
If references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.
If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.