Beneficial Moral Hazard and the Theory of the Second Best

2009 ◽  
Vol 46 (2) ◽  
pp. 229-240 ◽  
Author(s):  
Kevin D. Frick ◽  
Michael E. Chernew
Keyword(s):  
Health Insurance ◽  
Moral Hazard ◽  
Medical Care ◽  
Market Power ◽  
Economic Efficiency ◽  
Second Best ◽  
Welfare Consequences

This article examines the welfare consequences of moral hazard, and brings together several arguments suggesting that, in many cases, the additional consumption associated with health insurance could be welfare enhancing. Since conditions for maximum economic efficiency fail to hold in the market for medical care, the theory of the second best is useful. We focus on three efficiency-related reasons why insurance-induced consumption may improve welfare: 1) insurance can offset market power; 2) insurance can remedy some externalities; and 3) insurance can mitigate problems that are associated with misinformation and result in the underutilization of many types of care. These arguments strengthen the case for expanding coverage.

Economic and social problems of providing medical care to kidney and liver recipients on an outpatient basis (on the example of a regional outpatient transplantation center)

2020 ◽  
pp. 23-33
Author(s):  
Sergey Romanov ◽  
Sergey Zhukov ◽  
Svetlana Dzyubak
Keyword(s):  
Medical Care ◽  
Organ Transplantation ◽  
Economic Efficiency ◽  
Social Problems ◽  
Rehabilitation Program ◽  
Outpatient Basis ◽  
Medical Organization ◽  
Payment Mechanism ◽  
Transplantation Center ◽  
Outpatient Settings

The article is devoted to the problems of providing medical care in outpatient settings to patients who have undergone organ transplantation. The authors analyzed the economic efficiency of the outpatient transplantation center and concluded that a new payment mechanism for this type of medical services is needed. In addition, the article describes the system of social measures necessary for recipients of organs that are performed in a medical organization due to the lack of a rehabilitation program for such patients.

Sicker and Poorer—The Consequences of Being Uninsured: A Review of the Research on the Relationship between Health Insurance, Medical Care Use, Health, Work, and Income

2003 ◽  
Vol 60 (2_suppl) ◽  
pp. 3S-75S ◽  
Author(s):  
Jack Hadley
Keyword(s):  
Health Insurance ◽  
Medical Care ◽  
Data Sets ◽  
Work Effort ◽  
Services Research ◽  
The Past ◽  
Medical Care Use ◽  
Process Studies ◽  
Annual Earnings ◽  
The Relationship

Health services research conducted over the past 25 years makes a compelling case that having health insurance or using more medical care would improve the health of the uninsured. The literature's broad range of conditions, populations, and methods makes it difficult to derive a precise quantitative estimate of the effect of having health insurance on the uninsured's health. Some mortality studies imply that a 4% to 5% reduction in the uninsured's mortality is a lower bound; other studies suggest that the reductions could be as high as 20% to 25%. Although all of the studies reviewed suffer from methodological flaws of varying degrees, there is substantial qualitative consistency across studies of different medical conditions conducted at different times and using different data sets and statistical methods. Corroborating process studies find that the uninsured receive fewer preventive and diagnostic services, tend to be more severely ill when diagnosed, and receive less therapeutic care. Other literature suggests that improving health status from fair or poor to very good or excellent would increase both work effort and annual earnings by approximately 15% to 20%.

scholarly journals Indemnifying precaution: economic insights for regulation of a highly infectious disease

2020 ◽  
Vol 7 (1) ◽  
Author(s):  
Christopher T Robertson ◽  
K Aleks Schaefer ◽  
Daniel Scheitrum ◽  
Sergio Puig ◽  
Keith Joiner
Keyword(s):  
Infectious Disease ◽  
Health Insurance ◽  
Social Norms ◽  
Moral Hazard ◽  
Risky Behaviors ◽  
Deterrence Theory ◽  
Legal Intervention ◽  
Social Distancing ◽  
Personal Risk ◽  
Personal Costs

Abstract Economic insights are powerful for understanding the challenge of managing a highly infectious disease, such as COVID-19, through behavioral precautions including social distancing. One problem is a form of moral hazard, which arises when some individuals face less personal risk of harm or bear greater personal costs of taking precautions. Without legal intervention, some individuals will see socially risky behaviors as personally less costly than socially beneficial behaviors, a balance that makes those beneficial behaviors unsustainable. For insights, we review health insurance moral hazard, agricultural infectious disease policy, and deterrence theory, but find that classic enforcement strategies of punishing noncompliant people are stymied. One mechanism is for policymakers to indemnify individuals for losses associated with taking those socially desirable behaviors to reduce the spread. We develop a coherent approach for doing so, based on conditional cash payments and precommitments by citizens, which may also be reinforced by social norms.

The Effect of Health Insurance on the Demand for Medical Care

1973 ◽  
Vol 81 (2, Part 1) ◽  
pp. 281-305 ◽  
Author(s):  
Richard N. Rosett ◽  
Lien-fu Huang
Keyword(s):  
Health Insurance ◽  
Medical Care

THE PEDIATRICIAN AND THE PUBLIC

PEDIATRICS ◽  
1951 ◽  
Vol 8 (3) ◽  
pp. 435-445
Keyword(s):  
Health Insurance ◽  
Medical Care ◽  
Adult Life ◽  
Care Program ◽  
Dental Service ◽  
School Age ◽  
Present Communication ◽  
Dental Services ◽  
The Public ◽  
Comprehensive Programs

THE first communication is on "Health Insurance in Canada from the Paediatric View" by Dr. John Keith with an introductory letter from Dr. Alan Brown. In 1943, the Canadian Medical Association approved the principle of health insurance and set forth the opinion that health insurance programs should be developed by the various provinces in accordance with their local needs (J. Pediat. 31:228, Aug., 1947). In the intervening years some provinces have developed quite comprehensive programs of medical care (Pediatrics 7:430, 1951) whereas other provinces have taken very little action. The present communication describes these endeavors from the viewpoint of the pediatrician. The second communication from Dr. John T. Fulton, Dental Services Adviser of the U. S. Children's Bureau, describes his observations of New Zealand's National Dental Service. The medical care program in New Zealand has received wide publicity; the National Dental Service, which was inaugurated much earlier, has received relatively little comment until recently. The dental care problem everywhere is enormous. Children of school age average to develop one new caries lesion per year. The dental manpower currently available in this country does not begin to be adequate to deal with the problem; the result is that the majority of children enter adult life with a large accumulation of dental defects.

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