Unbiased Analysis of Today's Healthcare Issues
A paper by Li and Laxminarayan (Health Econ forthcoming) examines an interesting question: Are physicians sensitive to drug prices faced by their patients? In an ideal world, physicians act as perfect agents for their patients, taking into consideration their medical needs and financial constraints. In reality, the choice of drug and whether a generic or brand-name…
Insurance schemes offer two types of reimbursement to beneficiaries for health care services: immediate reimbursement and delayed reimbursement. In the former, the patient only pays the copayment or deductible, the insurer reimburses the providers directly for their services. In the latter case, the patient pays for the full cost of care and is only later…
Merrill Goozner of GoozNews writes the following: The share of health care costs borne by individuals has remained fairly steady over the past several decades, and that is the prime argument behind conservative and economist claims that making patients have “more skin in the game” will drive health care costs lower. That ignores the fact…
Many policy experts have been proponents of value-based cost sharing. Under value-based cost sharing, medical care that is seen to provide a higher marginal benefit to the patient will have lower coinsurance rates than medical care with lower marginal benefits. If value-based cost sharing would be implemented, preventive care should have low coinsurance rates because…
Economists and health researchers have generally shown that when doctors are paid on a fee-for-service basis, they will advice the patient to undergo more medical procedures than when the doctor is paid on a capitation or salaried basis (see my own paper: “Operating on Commission“). Which payment method maximizes welfare has not been proven and…