Optimal health insurance: the case of observable, severe illness
We explore optimal cost-sharing provisions for insurance contracts when individuals have observable, severe diseases with a discrete number of medically appropriate treatment options. Variation in preferences for alternative treatments is unobserved by the insurer and non-contractible. Interest in s...
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| Veröffentlicht in: | Journal of health economics 2000-09, Vol.19 (5), p.585-609 |
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| container_end_page | 609 |
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| container_issue | 5 |
| container_start_page | 585 |
| container_title | Journal of health economics |
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| creator | Chernew, Michael E. Encinosa, William E. Hirth, Richard A. |
| description | We explore optimal cost-sharing provisions for insurance contracts when individuals have observable, severe diseases with a discrete number of medically appropriate treatment options. Variation in preferences for alternative treatments is unobserved by the insurer and non-contractible. Interest in such situations is increasingly common, exemplified by disease carve-out programs and shared decision-making (SDM) tools. We demonstrate that optimal insurance charges a copay to patients choosing the high-cost treatment and provides consumers of the low-cost treatment a cash payment. A simulation of the effect of such a policy, based on prostate cancer, indicates a substantial reduction in moral hazard. |
| doi_str_mv | 10.1016/S0167-6296(00)00061-8 |
| format | Article |
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Variation in preferences for alternative treatments is unobserved by the insurer and non-contractible. Interest in such situations is increasingly common, exemplified by disease carve-out programs and shared decision-making (SDM) tools. We demonstrate that optimal insurance charges a copay to patients choosing the high-cost treatment and provides consumers of the low-cost treatment a cash payment. A simulation of the effect of such a policy, based on prostate cancer, indicates a substantial reduction in moral hazard.</description><subject>Chronic sickness</subject><subject>Cost Sharing</subject><subject>Decision Making</subject><subject>Deductibles and Coinsurance - economics</subject><subject>Disease Management</subject><subject>Fees and Charges</subject><subject>Group decision making</subject><subject>Health administration</subject><subject>Health economics</subject><subject>Health expenditure</subject><subject>Health insurance</subject><subject>Humans</subject><subject>Illness</subject><subject>Insurance, Health - economics</subject><subject>Insurance, Health - standards</subject><subject>Male</subject><subject>Mathematical models</subject><subject>Models, Econometric</subject><subject>Moral dilemmas</subject><subject>Moral hazard</subject><subject>Morals</subject><subject>Optimization</subject><subject>Patient Satisfaction - economics</subject><subject>Payments</subject><subject>Preferences</subject><subject>Prostatic cancer</subject><subject>Prostatic Neoplasms - economics</subject><subject>Prostatic Neoplasms - therapy</subject><subject>Statistical analysis</subject><subject>Studies</subject><subject>Treatment-specific copayments</subject><issn>0167-6296</issn><issn>1879-1646</issn><fulltext>true</fulltext><rsrctype>article</rsrctype><creationdate>2000</creationdate><recordtype>article</recordtype><sourceid>EIF</sourceid><sourceid>X2L</sourceid><sourceid>7QJ</sourceid><recordid>eNqFkU1v1DAQhi0EotvCTwBFHFCRCIzt2I65AKr4VKUegLPldSaKV9kktZOV-u-Z7a6KxGUPM3N53tHYD2MvOLzjwPX7X9RMqYXVlwBvAEDzsn7EVrw2tuS60o_Z6gE5Y-c5bwgCJe1TdsY5rytj1Yp9upnmuPV90aHv566IQ16SHwJ-KOYOi-AzFmNbjOuMaefXPb4tMu4wYRH7fsCcn7Enre8zPj_OC_bn65ffV9_L65tvP64-X5dBWzOXGLivWhEUAAqU2nuNlaxAthqDFBZ0bbCVsmmEWZtaAkjOwRilWg-iMvKCvT7sndJ4u2Ce3TbmgH3vBxyX7IyQtbXqNKhMxZWS8iRI-7gAqQh89R-4GZc00GudAFVLIStBkDpAIY05J2zdlOhj053j4PbG3L0xt9fhANy9MVdT7uchl3DC8BBCxE2HYRzczknPLbU7KkExGpFKUU37WSunwbpu3tKyl8dLl_UWm38nHH0T8PEAIKnaRUwuh4iku4kJw-yaMZ649y8i_LuK</recordid><startdate>20000901</startdate><enddate>20000901</enddate><creator>Chernew, Michael E.</creator><creator>Encinosa, William E.</creator><creator>Hirth, Richard A.</creator><general>Elsevier B.V</general><general>Elsevier</general><general>Elsevier Sequoia S.A</general><scope>CGR</scope><scope>CUY</scope><scope>CVF</scope><scope>ECM</scope><scope>EIF</scope><scope>NPM</scope><scope>DKI</scope><scope>X2L</scope><scope>AAYXX</scope><scope>CITATION</scope><scope>7QJ</scope><scope>7T2</scope><scope>8BJ</scope><scope>C1K</scope><scope>FQK</scope><scope>JBE</scope><scope>K9.</scope><scope>7X8</scope></search><sort><creationdate>20000901</creationdate><title>Optimal health insurance: the case of observable, severe illness</title><author>Chernew, Michael E. ; Encinosa, William E. ; Hirth, Richard A.</author></sort><facets><frbrtype>5</frbrtype><frbrgroupid>cdi_FETCH-LOGICAL-c697t-ec1a4f2c500e2e36aa6e43403f6ec3290687ef33dd27b7830031107755fa02473</frbrgroupid><rsrctype>articles</rsrctype><prefilter>articles</prefilter><language>eng</language><creationdate>2000</creationdate><topic>Chronic sickness</topic><topic>Cost Sharing</topic><topic>Decision Making</topic><topic>Deductibles and Coinsurance - economics</topic><topic>Disease Management</topic><topic>Fees and Charges</topic><topic>Group decision making</topic><topic>Health administration</topic><topic>Health economics</topic><topic>Health expenditure</topic><topic>Health insurance</topic><topic>Humans</topic><topic>Illness</topic><topic>Insurance, Health - economics</topic><topic>Insurance, Health - standards</topic><topic>Male</topic><topic>Mathematical models</topic><topic>Models, Econometric</topic><topic>Moral dilemmas</topic><topic>Moral hazard</topic><topic>Morals</topic><topic>Optimization</topic><topic>Patient Satisfaction - economics</topic><topic>Payments</topic><topic>Preferences</topic><topic>Prostatic cancer</topic><topic>Prostatic Neoplasms - economics</topic><topic>Prostatic Neoplasms - therapy</topic><topic>Statistical analysis</topic><topic>Studies</topic><topic>Treatment-specific copayments</topic><toplevel>peer_reviewed</toplevel><toplevel>online_resources</toplevel><creatorcontrib>Chernew, Michael E.</creatorcontrib><creatorcontrib>Encinosa, William E.</creatorcontrib><creatorcontrib>Hirth, Richard A.</creatorcontrib><collection>Medline</collection><collection>MEDLINE</collection><collection>MEDLINE (Ovid)</collection><collection>MEDLINE</collection><collection>MEDLINE</collection><collection>PubMed</collection><collection>RePEc IDEAS</collection><collection>RePEc</collection><collection>CrossRef</collection><collection>Applied Social Sciences Index & Abstracts (ASSIA)</collection><collection>Health and Safety Science Abstracts (Full archive)</collection><collection>International Bibliography of the Social Sciences (IBSS)</collection><collection>Environmental Sciences and Pollution Management</collection><collection>International Bibliography of the Social Sciences</collection><collection>International Bibliography of the Social Sciences</collection><collection>ProQuest Health & Medical Complete (Alumni)</collection><collection>MEDLINE - Academic</collection><jtitle>Journal of health economics</jtitle></facets><delivery><delcategory>Remote Search Resource</delcategory><fulltext>fulltext</fulltext></delivery><addata><au>Chernew, Michael E.</au><au>Encinosa, William E.</au><au>Hirth, Richard A.</au><format>journal</format><genre>article</genre><ristype>JOUR</ristype><atitle>Optimal health insurance: the case of observable, severe illness</atitle><jtitle>Journal of health economics</jtitle><addtitle>J Health Econ</addtitle><date>2000-09-01</date><risdate>2000</risdate><volume>19</volume><issue>5</issue><spage>585</spage><epage>609</epage><pages>585-609</pages><issn>0167-6296</issn><eissn>1879-1646</eissn><coden>JHECD9</coden><abstract>We explore optimal cost-sharing provisions for insurance contracts when individuals have observable, severe diseases with a discrete number of medically appropriate treatment options. 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| identifier | ISSN: 0167-6296 |
| ispartof | Journal of health economics, 2000-09, Vol.19 (5), p.585-609 |
| issn | 0167-6296 1879-1646 |
| language | eng |
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| source | Applied Social Sciences Index & Abstracts (ASSIA); MEDLINE; RePEc; Access via ScienceDirect (Elsevier) |
| subjects | Chronic sickness Cost Sharing Decision Making Deductibles and Coinsurance - economics Disease Management Fees and Charges Group decision making Health administration Health economics Health expenditure Health insurance Humans Illness Insurance, Health - economics Insurance, Health - standards Male Mathematical models Models, Econometric Moral dilemmas Moral hazard Morals Optimization Patient Satisfaction - economics Payments Preferences Prostatic cancer Prostatic Neoplasms - economics Prostatic Neoplasms - therapy Statistical analysis Studies Treatment-specific copayments |
| title | Optimal health insurance: the case of observable, severe illness |
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