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Welfare implications of learning through solicitation versus diversification in health care

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  • Basu, Anirban

Abstract

Using Roy's model of sorting behavior, I study welfare implications of learning about medical care quality through the current health care data production infrastructure that relies on solicitation of research subjects. Due to severe adverse-selection issues, I show that such learning could be biased and welfare decreasing. Direct diversification of treatment receipt may solve these issues but is infeasible. Unifying Manski's work on diversified treatment choice under ambiguity and Heckman's work on estimating heterogeneous treatment effects, I propose a new infrastructure based on temporary diversification of access that resolves the prior issues and can identify nuanced effect heterogeneity.

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  • Basu, Anirban, 2015. "Welfare implications of learning through solicitation versus diversification in health care," Journal of Health Economics, Elsevier, vol. 42(C), pages 165-173.
  • Handle: RePEc:eee:jhecon:v:42:y:2015:i:c:p:165-173
    DOI: 10.1016/j.jhealeco.2015.04.001
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    1. Basu, Anirban & Jena, Anupam B. & Philipson, Tomas J., 2011. "The impact of comparative effectiveness research on health and health care spending," Journal of Health Economics, Elsevier, vol. 30(4), pages 695-706, July.
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    5. Basu, Anirban, 2011. "Economics of individualization in comparative effectiveness research and a basis for a patient-centered health care," Journal of Health Economics, Elsevier, vol. 30(3), pages 549-559, May.
    6. Anirban Basu, 2014. "ESTIMATING PERSON‐CENTERED TREATMENT (PeT) EFFECTS USING INSTRUMENTAL VARIABLES: AN APPLICATION TO EVALUATING PROSTATE CANCER TREATMENTS," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 29(4), pages 671-691, June.
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    9. Charles F. Manski, 2009. "The 2009 Lawrence R. Klein Lecture: Diversified Treatment Under Ambiguity," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 50(4), pages 1013-1041, November.
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    Cited by:

    1. Anirban Basu, 2018. "Comment: Manski's views on patient care under uncertainty," Health Economics, John Wiley & Sons, Ltd., vol. 27(10), pages 1422-1424, October.

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    More about this item

    Keywords

    Learning; Diversification; Comparative effectiveness research; Economic evaluation; Instrumental variables; Heterogeneity;
    All these keywords.

    JEL classification:

    • C1 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General
    • C9 - Mathematical and Quantitative Methods - - Design of Experiments
    • D6 - Microeconomics - - Welfare Economics
    • I1 - Health, Education, and Welfare - - Health

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