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The Role of Consumer Knowledge of Insurance Benefits in the Demand for Preventative Health

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Author Info
Stephen T. Parente
David Salkever
Joan DaVanzo

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Abstract

In 1992, the United States Centers for Medicare and Medicaid Services (CMS) introduced new insurance coverage for two preventive services influenza vaccinations and mammograms. Economists typically assume transactions occur with perfect information and foresight. As a test of the value of information, we estimate the effect of consumer knowledge of these benefits on their demand. Treating knowledge as endogenous in a two-part model of demand, we find that consumer knowledge has a substantial positive effect on the use of preventive services. Our findings suggest that strategies to educate the insured Medicare population about coverage of preventive services may have substantial social value.

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Paper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 9912.

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Date of creation: Aug 2003
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Handle: RePEc:nbr:nberwo:9912

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I1 - Health, Education, and Welfare - - Health

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  1. Julia Witt, 2008. "The effect of information in the utilization of preventive health-care strategies: An application to breast cancer," Health Economics, John Wiley & Sons, Ltd., vol. 17(6), pages 721-731. [Downloadable!]
  2. Jürgen Maurer, 2008. "Who has a clue to preventing the flu? Unravelling supply and demand effects on the take-up of influenza vaccinations," MEA discussion paper series 08170, Mannheim Research Institute for the Economics of Aging (MEA), University of Mannheim. [Downloadable!]
  3. M. Kate Bundorf & Laurence Baker & Sara Singer & Todd Wagner, 2004. "Consumer Demand for Health Information on the Internet," NBER Working Papers 10386, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
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