Handbook of Health Economics (eBook)

Front Cover 1
Handbook of Health Economics 4
Copyright Page 5
CONTENTS OF VOLUME 1A 14
Introduction to the Series 6
Contents of the Handbook 8
Acknowledgments 12
Introduction: The State and Scope of Health Economics 25
The health of health economics 25
The scope of health economics 27
The scope of the Handbook 30
References 31
PART 1: OVERVIEWS AND PARADIGMS 33
Chapter 1. International Comparisons of Health Expenditure: Theory, Data and Econometric Analysis* 35
Abstract 36
Keywords 36
1. Background and overview 37
2. First-generation studies 45
3. Second-generation studies 53
4. Summary and concluding remarks 69
References 73
Chapter 2. An Overview of the Normative Economics of the Health Sector* 79
Abstract 80
Keywords 80
1. Introduction 81
2. Efficiency and normative frameworks 83
3. Health care as an economic commodity 91
4. Equity in the health sector 111
5. Evaluation of programs and interventions 120
6. Concluding observations: health economists as policy advisors 131
References 134
Chapter 3. Medical Care Prices and Output* 143
Abstract 144
Keywords 145
1. Introduction 146
2. The market environment underlying medical care CPIs and PPIs 148
3. Construction of medical care CPIs and PPIs at the BLS 159
4. Related research on medical care price indexes 186
5. A new medical care expenditure price index based on episode treatment costs 187
6. Medical care price indexes in the national income and product accounts 190
References 199
Chapter 4. Advances in CE Analysis* 205
Abstract 206
Keywords 206
1. Introduction 207
2. Cost-effectiveness analysis for decision making 211
3. When does CE analysis lead to optimal decisions? 222
4. Perspective and cost measurement 228
5. Measuring outcomes 235
6. Recommendations 242
References 243
Chapter 5. Information Diffusion and Best Practice Adoption* 247
Abstract 248
Keywords 248
1. Introduction 249
2. Market equilibrium and price variability 252
3. Disagreement about the production function 261
4. Production and dissemination of information 281
References 285
Chapter 6. Health Econometrics* 289
Abstract 291
1. Introduction 292
2. Identification and estimation 292
3. Qualitative dependent variables 299
4. Limited dependent variables 309
5. Unobservable heterogeneity and simultaneous equations 323
6. Longitudinal and hierarchical data 329
7. Count data regressions 339
8. Duration analysis 349
9. Stochastic frontiers 355
10. Conclusion 359
References 360
PART 2: DEMAND AND REIMBURSEMENT FOR MEDICAL SERVICES 369
Chapter 7. The Human Capital Model* 371
Abstract 372
1. Introduction 373
2. Basic model 376
3. Pure investment model 391
4. Pure consumption model 398
5. Empirical testing 401
6. Extensions 407
7. Health and schooling 419
8. Conclusions 428
References 429
Chapter 8. Moral Hazard and Consumer Incentives in Health Care* 433
Abstract 434
1. Introduction and overview 435
2. Dimensions of consumer incentives in health care 436
3. The amount of delegation of authority to the physician 438
4. Incentives and ex ante moral hazard 439
5. Incentives and static ex post moral hazard 444
6. Dynamic ex post moral hazard 475
7. Concluding remarks 477
References 479
Chapter 9. Physician Agency* 485
Abstract 486
Keywords 486
1. Introduction 487
2. Demand and supply for physician services 492
3. Physician behavior with complete information 499
4. Uncertainty about treatment effects and asymmetric information 520
5. Physician-induced demand 527
6. Other physician objectives 544
7. Conclusion 550
References 552
Chapter 10. Insurance Reimbursement 561
Abstract 562
1. Introduction 563
2. Reimbursement in the theory of insurance 563
3. Medical services are different 564
4. Indemnity insurance and the theory of health insurance benefits 565
5. Optimal reimbursement in price-taking markets with and without moral hazard 566
6. Service benefit insurance 569
7. Balance billing 571
8. Substitutes and complements 572
9. Alternatives to reimbursing market-level fee for service 572
10. Monopsony and provider market power 575
11. Reimbursement and productive efficiency 577
12. Heterogeneity in non-competitive markets 578
13. Empirical results on reimbursement 580
14. Bidding models 581
15. Conclusion 582
References 582
PART 3: INSURANCE MARKETS, MANAGED CARE, AND CONTRACTING 585
Chapter 11. The Anatomy of Health Insurance* 587
Abstract 588
Keywords 589
1. Health insurance structures in developed nations 592
2. The principles of insurance 595
3. Moral hazard and principal-agent problems 600
4. Relationships between insurers and providers 614
5. Optimal mix of demand- and supply-side controls 628
6. Markets for health insurance: plan choice and adverse selection 630
7. Person-specific pricing, contract length, and premium uncertainty 650
8. Insurance and health outcomes 653
9. Conclusions and implications 655
Appendix 658
References 661
Chapter 12. Health Insurance and the Labor Market* 669
Abstract 670
Keywords 670
1. Background on health insurance and the labor market 672
2. Health insurance and labor market equilibrium – theory 678
3. Evidence on health insurance and job-job mobility 688
4. Health insurance and participation in the labor force and public assistance programs 698
5. Evidence on health insurance and wages, hours, and employment 713
6. Conclusions 723
References 724
Chapter 13. Managed Care* 731
Abstract 732
Keywords 732
1. Introduction 733
2. What is managed care? 735
3. History of managed care 741
4. Managed care and market failure 745
5. Empirical research on managed care 751
6. Economic issues related to the growth of managed care 767
7. Conclusions 769
References 769
Chapter 14. Risk Adjustment in Competitive Health Plan Markets* 779
Abstract 781
1. Introduction 782
2. Conceptual aspects of risk adjustment 788
3. Risk adjustment models 803
4. Risk sharing 841
5. The practice of risk adjustment and risk sharing 853
6. Directions for future research 860
References 861
Chapter 15. Government Purchasing of Health Services* 871
Abstract 872
Keywords 872
1. Introduction 873
2. Quality and costs 877
3. Quality, demand and fixed price contracts 881
4. Empirical findings 886
5. Asymmetric information on costs and case-mix 891
6. Commitment, hold-up, and the ratchet effect 898
7. Reputations 902
8. Conclusion 908
Appendix: The framework with a private market 909
References 911
AUTHOR INDEX 915
SUBJECT INDEX 959