Moral hazard and consumer incentives in health care
In: Handbook of Health Economics
Consumer incentives are reflected in a wide range of choices, many of which occur in both insurance- and tax-financed health care systems. However, health insurance and sick leave pay cause consumer incentives to be reflected in moral hazard effects of several types. Theoretically, ex ante moral hazard (a reduction of preventive effort in response to insurance coverage) is not unambiguously predicted, and there is very limited empirical evidence about it. The case for static ex post moral hazard (an increase in the demand for medical care of a given technology) is stronger. The empirical evidence reported comes from three sources, natural experiments, observational comparisons of individuals, and the Health Insurance Experiment (HIE). The distinguishing feature of the HIE is that participants were assigned to insurance plans, which forestalls the possibility of good risks self-selecting plans with substantial cost sharing, resulting in an overestimate of the effects of plan design on health care expenditure. While the values of estimated price elasticities vary widely among the three sources and less markedly according to the type of care (outpatient, hospital, dental, mental), the responsiveness of the demand for medical care to net price is beyond doubt. The pure price elasticity for medical care in excess of a deductible (i.e. where the marginal price is constant) was estimated by HIE at -0.2 overall. Finally, there may be a dynamic moral hazard effect (choice biased in favor of new, usually more expensive medical technology). Here, the empirical evidence is very scanty again. Another promising field for future research is the interplay between consumer incentives and rationing by the physician in managed care.
If 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.
|This chapter was published in: ||This item is provided by Elsevier in its series Handbook of Health Economics with number
1-08.||Handle:|| RePEc:eee:heachp:1-08||Contact details of provider:|| Web page: http://www.elsevier.com/wps/find/bookseriesdescription.cws_home/BS_HE/description|
When requesting a correction, please mention this item's handle: RePEc:eee:heachp:1-08. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Dana Niculescu)
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.