Consumer Channeling and Preferred Providers

Doctors often complain that health insurers are squeezing their profit margins. These insurers offer the physicians access to patients as part of their network in exchange for discounted fees. Physicians can decide not to join the network and charge higher prices, but may be left with fewer patients. The bargaining power of the health insurer…

Information on pharmaceutical prices

Economic theory says that for commodities, there should be one market price. For instance, there is one worldwide price for oil, metals also have a one worldwide price. While there is significant heterogeneity between different types of medical treatments, one would expect that the price of pharmaceuticals would be the same or very similar across…

Willingess to pay (WTP) perspectives

Many health economists wonder how much individuals would be willing to pay for a treatment. Since most medical care is paid by third parties (i.e. private insurance companies or the government) we can not use revealed preference econometrics which has been used in other areas of economics. Instead, many economists ask individuals directly these valuation…

Increase the income tax on men only?

According to optimal tax theory, taxes should be highest on relatively inelastic activities.  For instance, most men work full-time and and the tax rate does not affect this.  On the other hand, it has been should that the labor supply of women is much more sensitive to wages and income tax rates.  If we follow…

Welfarists vs. Extra-welfarists

Health economists, policy makers, physicians and public health officials all want to maximize the well-being of society. These groups evaluate different medical treatments or public health interventions and then determine if the benefit is worth the cost. In an opinion piece by Dorte Gyrd-Hansen in Pharmacoeconomics (2005), two schools of thought are examined. Those who…