Choose an application

• Reference Manager
• EndNote
• RefWorks (Direct export to RefWorks)

Choose an application

• Reference Manager
• EndNote
• RefWorks (Direct export to RefWorks)

Public financing of private health insurance may generate external effects beyond the subsidized population, by influencing the size and bargaining power of health insurers. We test for this external effect in the context of Medicare Part D. We analyze how Part D-related insurer size increases impacted retail drug prices negotiated by insurers for their non-Part D commercial market. On average, Part D lowered retail prices for commercial insureds by 5.8% to 8.5%. The cost-savings to the commercial market amount to $3bn per year, which approximates the total annual savings experienced by Part D beneficiaries who previously lacked drug coverage.

Zonder onderwerpscode: economie

Choose an application

• Reference Manager
• EndNote
• RefWorks (Direct export to RefWorks)

Policymakers and the public are concerned about the role of medical malpractice liability in the rising cost of medical care. We use variation in the generosity of local juries to identify the causal impact of malpractice liability on medical costs, mortality, and social welfare. The effect of malpractice on medical costs is large relative to its share of medical expenditures, but relatively modest in absolute terms—growth in malpractice payments over the last decade and a half contributed at most 5.0% to the total real growth in medical expenditures, which topped 33% over this period. On the other side of the ledger, malpractice liability leads to modest reductions in patient mortality; the value of these more than likely exceeds the cost impacts of malpractice liability. Therefore, policies that reduce expected malpractice costs are unlikely to have a major impact on health care spending for the average patient, and are also unlikely to be cost-effective over conventionally accepted ranges for the value of a statistical life.

Zonder onderwerpscode: economie

Choose an application

• Reference Manager
• EndNote
• RefWorks (Direct export to RefWorks)

A longstanding literature explores how altruism affects the way physicians respond to incentives and provide care. We analyze how patient socioeconomic status mediates these responses. We show theoretically that patient socioeconomic status systematically influences the way physicians respond to reimbursement changes, and we identify the channels through which these effects operate. We use two Medicare reimbursement changes to investigate these insights empirically. We confirm that a given physician facing an increase in reimbursement boosts utilization by more when treating richer patients. We show that average supply price elasticities vary from 0.02 to 0.18 for a given physician, depending on the patient's socioeconomic status. Finally, we show that the Medicare reforms we study led to overall reimbursement increases that raised healthcare utilization by 10% more for high-income patients compared to their low-income peers.

Choose an application

• Reference Manager
• EndNote
• RefWorks (Direct export to RefWorks)

Cost-effectiveness analysis (CEA), despite its known limitations, continues as the primary method used for health technology assessment (HTA) both officially (UK, Australia and Canada) and less formally elsewhere. Standard CEA models compare incremental cost increases to incremental average gains in health, commonly expressed in Quality-Adjusted Life Years (QALYs). Our research generalizes earlier CEA models in several ways. First, we introduce risk aversion in Quality of Life (QoL), which affects willingness to pay (WTP) for health care, leading to WTP thresholds that rise with illness severity. Ignoring risk aversion in QoL over-values treatments for minor illnesses and under-values treatments for highly severe illnesses, perhaps by an order of magnitude. We call our generalized WTP threshold the Risk-Aversion and Severity-Adjusted WTP (RASA-WTP). Unlike traditional CEA analyses, which discriminate against persons with disabilities, our analysis implies that the marginal value of improving QoL rises for disabled individuals. Our model can also value the uncertain benefits of medical interventions by employing well-established analytic methods from finance. We develop a certainty-equivalent quality of life measure that we call the Risk-Adjusted QALY (RA-QALY), which accounts for consumer preferences over risky health outcomes. Finally, we show that traditional QALYs no longer serve as a single index of health, when consumers are risk-averse. To address this problem, we derive a generalized single-index of health outcomes--the Generalized Risk-Adjusted QALY (GRA-QALY). The GRA-QALY reinstates the equivalence between health gains from quality of life and gains from life extension, even in the presence of risk-aversion and treatment outcome uncertainty. Earlier models of CEA that abstract from risk-aversion nest as special cases of our more general model. We discuss new data necessary to implement our model and standard analytic methods by which the necessary parameters can be obtained.