Consumer-Directed Health Care: Can Consumers Look After Themselves?
AbstractIn health care systems today, including those of Switzerland and the United States, participants do not necessarily see the big picture of lifetime health costs and quality of life, and in many systems consumers and providers lack the incentives to manage preventative and chronic care to minimize lifetime private and social health costs. Resource allocation problems induced by asymmetric information and misaligned incentives are exacerbated if consumers fail to have the acuity or perspective needed to make choices consistent with their self-interest when faced with complex health care choices with ambiguous future consequences. This paper examines rationality of consumers' health perceptions and choices using as a natural experiment the recent introduction in the United States of a highly subsidized market for prescription drug insurance, and draws lessons from this experiment on the practicality of "Consumer Directed Health Care" as an approach to achieving efficient allocation of health care resources by confronting consumers with the full marginal costs of the services they use.
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Bibliographic InfoArticle provided by Swiss Society of Economics and Statistics (SSES) in its journal Swiss Journal of Economics and Statistics.
Volume (Year): 144 (2008)
Issue (Month): III (September)
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More information through EDIRC
prescription drugs; health insurance; Medicare Part D;
Other versions of this item:
- McFadden, Daniel & Winter, Joachim & Heiss, Florian, 2008. "Consumer-Directed Health Care: Can Consumers Look After Themselves?," Discussion Papers in Economics 4805, University of Munich, Department of Economics.
- C25 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Discrete Regression and Qualitative Choice Models; Discrete Regressors; Proportions
- C61 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Optimization Techniques; Programming Models; Dynamic Analysis
- C81 - Mathematical and Quantitative Methods - - Data Collection and Data Estimation Methodology; Computer Programs - - - Methodology for Collecting, Estimating, and Organizing Microeconomic Data
- D12 - Microeconomics - - Household Behavior - - - Consumer Economics: Empirical Analysis
- D91 - Microeconomics - - Intertemporal Choice and Growth - - - Intertemporal Consumer Choice; Life Cycle Models and Saving
- H51 - Public Economics - - National Government Expenditures and Related Policies - - - Government Expenditures and Health
- I10 - Health, Education, and Welfare - - Health - - - General
- I12 - Health, Education, and Welfare - - Health - - - Health Production
- I18 - Health, Education, and Welfare - - Health - - - Government Policy; Regulation; Public Health
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Florian Heiss & Daniel McFadden & Joachim Winter, 2010.
"Mind the Gap! Consumer Perceptions and Choices of Medicare Part D Prescription Drug Plans,"
in: Research Findings in the Economics of Aging, pages 413-481
National Bureau of Economic Research, Inc.
- Florian Heiss & Daniel McFadden & Joachim Winter, 2007. "Mind the Gap! Consumer Perceptions and Choices of Medicare Part D Prescription Drug Plans," NBER Working Papers 13627, National Bureau of Economic Research, Inc.
- Daniel McFadden, 2006. "Free Markets and Fettered Consumers," American Economic Review, American Economic Association, vol. 96(1), pages 5-29, March.
- Kesternich, Iris & Heiss, Florian & McFadden, Daniel & Winter, Joachim, 2012. "Suit the action to the word, the word to the action: Hypothetical choices and real decisions in Medicare Part D," Discussion Papers in Economics 14124, University of Munich, Department of Economics.
- Daniel McFadden, 2009. "The human side of mechanism design: a tribute to Leo Hurwicz and Jean-Jacque Laffont," Review of Economic Design, Springer, vol. 13(1), pages 77-100, April.
- Florian Heiss & Daniel McFadden & Joachim Winter, 2011. "The Demand for Medicare Part D Prescription Drug Coverage: Evidence from Four Waves of the Retirement Perspectives Survey," NBER Chapters, in: Explorations in the Economics of Aging, pages 159-182 National Bureau of Economic Research, Inc.
- Daniel McFadden & Carlos Noton & Pau Olivella, 2013.
"Remedies for Sick Insurance,"
Documentos de Trabajo
302, Centro de Economía Aplicada, Universidad de Chile.
- Daniel L. McFadden & Carlos E. Noton & Pau Olivella, 2012. "Remedies for Sick Insurance," NBER Working Papers 17938, National Bureau of Economic Research, Inc.
- Daniel McFadden & Carlos Noton & Pau Olivella, 2012. "Remedies for Sick Insurance," Working Papers 620, Barcelona Graduate School of Economics.
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