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Patient Costs and Physicians' Information

Author

Listed:
  • Michael J. Dickstein
  • Jihye Jeon
  • Eduardo Morales

Abstract

Health insurance plans in the U.S. increasingly use price mechanisms to steer demand for prescription drugs. The effectiveness of these incentives, however, depends both on physicians' price sensitivity and their knowledge of patient prices. We develop a moment inequality model that allows researchers to identify agents' preferences without fully specifying their information. Applying this model to diabetes care, we find that physicians lack detailed price information and are more price-elastic than full-information models imply. We predict that providing physicians detailed information on prices at the point of prescribing can save patients 12-23% of their out-of-pocket costs for diabetes treatment.

Suggested Citation

  • Michael J. Dickstein & Jihye Jeon & Eduardo Morales, 2024. "Patient Costs and Physicians' Information," NBER Working Papers 32014, National Bureau of Economic Research, Inc.
    • Handle: RePEc:nbr:nberwo:32014
    Note: EH IO
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    More about this item

    JEL classification:

    • I11 - Health, Education, and Welfare - - Health - - - Analysis of Health Care Markets
    • I13 - Health, Education, and Welfare - - Health - - - Health Insurance, Public and Private
    • L0 - Industrial Organization - - General
    • L15 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Information and Product Quality

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