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Author : Kevin David Frick
Publisher :
ISBN 13 :
Total Pages : 368 pages
Book Rating : 4.3/5 (91 download)
Download or read book Essays on Health Insurance Markets written by Kevin David Frick and published by . This book was released on 1996 with total page 368 pages. Available in PDF, EPUB and Kindle. Book excerpt:
Author : Juan Gabriel Fernandez
Publisher :
ISBN 13 :
Total Pages : 294 pages
Book Rating : 4.:/5 (826 download)
Download or read book Three Essays on Competition and Health Insurance Markets written by Juan Gabriel Fernandez and published by . This book was released on 2012 with total page 294 pages. Available in PDF, EPUB and Kindle. Book excerpt: Abstract: Health care systems are complex organizations. Multiple agents interact in different settings to provide health care, each one of them with different objectives and information. How markets are organized and which actions are allowed, has a direct impact on the incentives agents face when making health care choices. In this dissertation, I study the determinants and effects of these choices on market outcomes, focusing on private health insurance markets. The first chapter provides insights about health insurance markets in which workers, rather than firms, choose insurance plans in an imperfect competition setting. Using a unique dataset that includes every person enrolled in private plans in Chile in 2009, I estimate underlying preference parameters over health insurance features. I find large heterogeneity in the valuation of these features across age-sex-groups and individual types. Individual characteristics play an important role on health plan choices and therefore, can be used by insurers to design plans targeted to specific groups and for patient selection. The second chapter presents a theoretical model where private insurers compete with a free public alternative to attract clients. Using a two-type model I show that if private insurance companies offer a non-rationing alternative and the public system rationing is done through random selection, an efficiency trap may exist. A marginal increase in the budget allocated to the public system can potentially reduce the expected welfare for all types. This result extends to a model with multiple types, but the negative welfare impact is offset by a crowding-in effect among the rich. Finally, the third chapter provides a general analytical framework that can be used to evaluate risk selection under different health care models. The model is based on the interactions between the four key agents present in every health care system: sponsors, health plans, providers and customers. This framework is used to review risk selection in four countries in the Americas -Canada, Chile, Colombia, and the U.S.-, showing how regulatory policies both create and ameliorate it, and in some cases are as important as risk adjustment, risk sharing and risk selection strategies for reducing risk selection.
Author : Richard Domurat
Publisher :
ISBN 13 :
Total Pages : 200 pages
Book Rating : 4.:/5 (17 download)
Download or read book Essays on the Economics of Health Insurance Markets written by Richard Domurat and published by . This book was released on 2018 with total page 200 pages. Available in PDF, EPUB and Kindle. Book excerpt: This dissertation includes three chapters on the health insurance markets established by the Affordable Care Act (ACA), known as exchanges. Chapter 1 estimates the demand for each plan in the California exchange using a discrete choice model. The model incorporates heterogeneity in consumer preferences and in product characteristics, including hospital and primary care physician (PCP) networks. Endogeneity of prices is addressed using networking hospital costs as instruments, and prices for any given plan can vary across consumers within a market. Consumers are highly sensitive to prices, with market shares declining by 3%-5% for just a $1 increase in the premium. Demand also responds to hospital and PCP networks, but to a relatively small degree. Along the take-up margin, a $1 increase in premium subsidy increases take-up by 1.4%. Chapter 2 uses a structural model of demand and supply to examine how two insurance market regulations--community rating and risk adjustment--affect prices and enrollment in the ACA exchange in California. Without risk adjustment, community rating in the ACA would lead to a significant reduction in enrollment in desirable plans and in take-up overall. Risk adjustment under the ACA roughly restores relative shares across plans to what they would be without community rating; however, the reduction in take-up is not restored. An alternative risk adjustment method can increase enrollment by 3.0% and would have little impact on government spending. Chapter 3, written jointly with Isaac Menashe and Wesley Yin, examines the impact of information on insurance take-up in the ACA. We exploit experimental variation in the information mailed to 87,000 households in California's exchange to study the role of frictions in insurance take-up. We find that a basic reminder of the enrollment deadline raised enrollment by 1.4 pp (or 16 percent). Compared to the reminder alone, also reporting personalized subsidy benefits increases take-up among low-income individuals, but decreases take-up among higher-income individuals. This is despite reminder-only recipients eventually observing their subsidies before purchase. Finally, the letter interventions induced healthier individuals into the market, lowering aggregate spending risk by 5.9 percent, suggesting these interventions can improve both enrollment and average market risk.
Author : Ami Ko
Publisher :
ISBN 13 :
Total Pages : 282 pages
Book Rating : 4.:/5 (124 download)
Download or read book Essays on Health Care Markets written by Ami Ko and published by . This book was released on 2017 with total page 282 pages. Available in PDF, EPUB and Kindle. Book excerpt: The two chapters of my dissertation develop and estimate economic models to analyze the demand for and the provision of health care services. Specifically, I analyze the optimal design of health care markets to promote higher quality and lower cost, which can have profound implications for the well-being of people. The first chapter, "An Equilibrium Analysis of the Long-Term Care Insurance Market," uses a model of family interactions to explain why the long-term care insurance market has not been growing. By developing and estimating a structural model of family interactions, I study how family care affects the workings of the long-term care insurance market. I argue that private information about the availability of family care induces adverse selection where individuals with limited access to family care heavily select into insurance coverage. I demonstrate that pricing on family demographics substantially mitigates adverse selection by reducing the amounts of private information. I propose child demographic-based pricing as an alternative risk adjustment that could decrease the average premium, invigorate the market, and generate welfare gains. The second chapter, "Partial Rating Area Offering in the ACA Marketplaces," joint with Hanming Fang, studies insurance companies' plan offering decisions in the marketplaces established by the Patient Protection and Affordable Care Act of 2010 (ACA). Under the ACA, insurance companies can vary premiums by "rating areas" which usually consist of multiple counties. In a given rating area, the ACA mandates uniform pricing for all counties, but, it does not mandate universal offering. We first demonstrate that it is not uncommon to observe insurance companies selling plans to only a subset of counties within a rating area. Using both theoretical and empirical approaches, we find evidence that partial rating area coverage is explained by insurers' incentive to risk screen consumers. While the ACA allows price discrimination based on rating areas and not on counties, we argue that insurers are effectively price discriminating consumers based on counties by endogenously determining their service area within a rating area.
Author : Olga V. Milliken
Publisher :
ISBN 13 :
Total Pages : 284 pages
Book Rating : 4.:/5 (658 download)
Download or read book Three Essays in Health Economics and Public Policy written by Olga V. Milliken and published by . This book was released on 2008 with total page 284 pages. Available in PDF, EPUB and Kindle. Book excerpt:
Author : Chenyuan Liu
Publisher :
ISBN 13 :
Total Pages : 144 pages
Book Rating : 4.:/5 (116 download)
Download or read book Essays on Health Insurance Plan Design written by Chenyuan Liu and published by . This book was released on 2020 with total page 144 pages. Available in PDF, EPUB and Kindle. Book excerpt: Health care markets have great economic importance and represent a large share of GDP in the U.S. Health insurance plans play a key role in the efficiency of these markets. My dissertation studies the design of health insurance contracts and how they affect market efficiency. Chapter 1 of my dissertation the prevalence of financially dominated options in health plan menus. We analyze Kaiser Family Foundation data on health plans that firms offer to their employees. For firms offering both a high-deductible and lower-deductible health plan, 62 percent of the time the high-deductible option has lower maximum spending risk for the employee. We estimate that the high-deductible plan dominates at roughly half of firms. We identify adverse-selection pricing as a likely mechanism for these surprising patterns and discuss implications for our understanding of the value of plan choice in employer-sponsored health insurance. Chapter 2 of my dissertation identifies both theoretically and empirically a new channel of sorting in insurance markets under asymmetric information: sorting by plan design. A model allowing for rich contract designs predicts high-risk individuals will sort into risk-minimizing straight-deductible plans, while lower-risk individuals prefer plans that trade higher maximum expenditure risk for coverage against small losses. Analyzing data from the ACA Exchange, I find that within coverage tiers, plans vary significantly along multi-dimensional cost-sharing attributes. Further, straight-deductible plans attract higher-risk enrollees than other designs as the model predicts. I discuss how these insights can inform discussions around the standardization of insurance plans. Chapter 3 of my dissertation studies the effects of capitated payment models on physicians' treatment decisions in the treatment of lower back pain in the U.S. We use a large employer-sponsored health insurance claim database from 2003 to 2006, and leverage capitation variation within the plan and physician to mitigate selection concerns. We find that the treatment intensity of capitated patients is 5 to 10 percent lower than otherwise similar non-capitated patients, mainly from therapy, diagnostic testing, and drugs. We also find no evidence of increased readmission rates for capitated patients.
Author : Naoki Aizawa
Publisher :
ISBN 13 :
Total Pages : 264 pages
Book Rating : 4.:/5 (888 download)
Download or read book Essays on Health Insurance Market Design and Labor Market Interactions written by Naoki Aizawa and published by . This book was released on 2014 with total page 264 pages. Available in PDF, EPUB and Kindle. Book excerpt:
Author : Mark Shepard
Publisher :
ISBN 13 :
Total Pages : pages
Book Rating : 4.:/5 (914 download)
Download or read book Essays on Health Insurance and Annuities written by Mark Shepard and published by . This book was released on 2015 with total page pages. Available in PDF, EPUB and Kindle. Book excerpt: Insurance creates an important source of economic well-being by providing for beneficiaries in times of need. But because a variety of forces may inhibit the proper functioning of insurance markets, governments are deeply involved through regulation, subsidies, and direct provision of insurance. This dissertation studies insurance demand, supply, and the role of policy in two types of markets of direct interest to policymakers: health insurance and annuities. I highlight the importance of both traditional market failures (adverse selection and moral hazard) and less standard factors like limited competition (market power) and puzzlingly low insurance demand to influence insurance market outcomes.
Author : James Bailey
Publisher :
ISBN 13 :
Total Pages : 84 pages
Book Rating : 4.:/5 (128 download)
Download or read book Three Essays on Health Insurance Regulation and the Labor Market written by James Bailey and published by . This book was released on 2014 with total page 84 pages. Available in PDF, EPUB and Kindle. Book excerpt: This dissertation continues the tradition of identifying the unintended consequences of the US health insurance system. Its main contribution is to estimate the size of the distortions caused by the employer-based system and regulations intended to fix it, while using methods that are more novel and appropriate than those of previous work. Chapter 1 examines the effect of state-level health insurance mandates, which are regulations intended to expand access to health insurance. It finds that these regulations have the unintended consequence of increasing insurance premiums, and that these regulations have been responsible for 9-23% of premium increases since 1996. The main contribution of the chapter is that its results are more general than previous work, since it considers many more years of data, and it studies the employer-based plans that cover most Americans rather than the much less common individual plans. Whereas Chapter 1 estimates the effect of the average mandate on premiums, Chapter 2 focuses on a specific mandate, one that requires insurers to cover prostate cancer screenings. The focus on a single mandate allows a broader and more careful analysis that demonstrates how health policies spill over to affect the labor market. I find that the mandate has a significant negative effect on the labor market outcomes of the very group it was intended to help. The mandate expands the treatments health insurance covers for men over age 50, but by doing so it makes them more expensive to insure and employ. Employers respond to this added expense by lowering wages and hiring fewer men over age 50. According to the theoretical model put forward in the chapter, this suggests the mandate reduces total welfare. Chapter 3 shows that the employer-based health insurance system has deterred entrepreneurship. It takes advantage of the natural experiment provided by the Affordable Care Act's dependent coverage mandate, which de-linked insurance from employment for many 19-25 year olds. Difference-in-difference estimates show that the mandate increased self-employment among the treated group by 13-24%. Instrumental variables estimates show that those who actually received parental health insurance as a result of the mandate were drastically more likely to start their own business. This suggest that concerns over health insurance are a major barrier to entrepreneurship in the United States.
Author : Marika Ilona Cabral
Publisher : Stanford University
ISBN 13 :
Total Pages : 290 pages
Book Rating : 4.F/5 ( download)
Download or read book Essays on Insurance and Taxation written by Marika Ilona Cabral and published by Stanford University. This book was released on 2011 with total page 290 pages. Available in PDF, EPUB and Kindle. Book excerpt: This dissertation consists of four distinct essays. In an essay entitled "Claim Timing and Ex Post Adverse Selection: Evidence from Dental 'Insurance, ' " I explore the impact of strategic timing on insurance market allocations. If people can delay a claim just long enough to buy more insurance coverage in anticipation of it, severe adverse selection may result, and in extreme cases, this can lead to the complete unraveling of an insurance market. I study these forces by analyzing dental treatments and insurance, with the goal of understanding insurance in the market for dental care and also revealing lessons that apply to insurance markets more broadly. Using rich claim-level data from a large firm, my analysis reveals that the strategic delay of treatment and the associated adverse selection may be an important factor in explaining why so few people have dental coverage in the US and why typical dental "insurance" contracts provide so little insurance. More generally, my results suggest that insurance products without contract features designed to limit coverage for strategically delayed costs (e.g., open-enrollment periods, pricing pre-existing conditions) may generate unraveling. An essay entitled "The Hated Property Tax: Salience, Tax Rates, and Tax Revolts" (with Caroline Hoxby), explores the relationship between the salience of the property tax and observed property tax rates. We hypothesize that high salience explains the unpopularity of the property tax, the level of the property tax, and prevalence of property tax revolts. To identify variation in the salience of the property tax over local jurisdictions and over time, we exploit conditionally random variation in tax escrow, a method of paying the property tax that makes it much less salient. We find that areas in which the property tax is less salient are areas in which property taxes are higher and property tax revolts are less likely to occur. In an essay entitled "Private Coverage and Public Costs: Identifying the Effect of Private Supplemental Insurance on Medicare Spending" (with Neale Mahoney), we explore the impact of private supplemental insurance on Medicare spending. Private supplemental insurance to "fill the gaps" of Medicare, known as Medigap, is very popular. We estimate the impact of this supplemental insurance on total medical spending using an instrumental variables strategy that leverages discontinuities in Medigap premiums at state boundaries. Our estimates suggest that Medigap increases medical spending by 57 percent---or about 40 percent more than previous estimates suggest. Back-of-the-envelope calculations indicate that a 20 percent tax on premiums would generate combined revenue and savings of 6.2 percent of Medicare baseline costs. An essay entitled "The Effect of Insurance Coverage on Preventive Care" (with Mark Cullen), explores the effect of insurance coverage on preventive care utilization. Using health insurance claims data from a large company, this paper examines the implementation of an insurance benefit design which differentially increased the marginal price of curative care (non-preventive care) while decreasing the marginal price of prevention. We examine the effect of the differential price change on the use of preventive procedures. We reveal evidence consistent with an important negative cross-price effect; that is, increases in the price of curative care can depress preventive care utilization.
Author : Petra Steinorth
Publisher : VVW GmbH
ISBN 13 : 3862980790
Total Pages : 146 pages
Book Rating : 4.8/5 (629 download)
Download or read book Essays on the Economics of Selected Multi-Period Insurance Decisions with Private Information written by Petra Steinorth and published by VVW GmbH. This book was released on 2011 with total page 146 pages. Available in PDF, EPUB and Kindle. Book excerpt: "Petra Steinorth präsentiert in ihrer in englischer Sprache vorgelegten kumulativen Dissertationsschrift drei theoretische Modelle, die Versicherungsentscheidungen über mehrere Perioden und bei privater Information seitens der Versicherungsnehmer ökonomisch untersuchen. Die Dissertation leistet einen wichtigen Beitrag zur theoretischen Forschung im Bereich Versicherungsökonomie, da insbesondere zu mehrperiodigen Fragestellungen noch großer Forschungsbedarf besteht: Der Beitrag ""Impact of Health Savings Accounts on Precautionary Savings, Demand for Health Insurance and Prevention Effort"" untersucht den Einfluss von steuerlich begünstigten Gesundheitssparkonten auf das Sparverhalten, die Nachfrage nach Krankenversicherung und Prävention. Im zweiten Beitrag ""Yes, No, Perhaps - Explaining the Demand for Risk Classification Insurance with Imperfect Private Information"" wird untersucht, welche Granularität der Risikoklassifizierung optimal ist, wenn die Versicherungsnehmer unvollständige private Information über ihren zukünftigen Risikotyp haben. Der dritte Beitrag ""The Demand for Enhanced Annuities"" analysiert die Reaktion des Marktes auf die Einführung von sogenannten Enhanced Annuities. Dabei handelt es sich um Rentenversicherungsprodukte, die die individuelle Lebenserwartung bei der Tarifierung berücksichtigen. Die wissenschaftliche Arbeit ist auch für Mitarbeiter in Versicherungsunternehmen von Interesse, da sie wichtige Bereiche des Produktmanagements in der Lebens- und Krankenversicherung behandelt. Petra Steinorth ́s dissertation consists of three theoretical models, which all examine the economics of selected multi-period insurance decisions with private information on the part of the insured. The thesis makes an important contribution to insurance economics literature as multi-period problems have not yet been widely studied. The article ""Impact of Health Savings Accounts on Precautionary Savings, Demand for Health Insurance and Prevention Effort"" investigates how tax incentives like health savings accounts influence savings for medical costs, the demand for health insurance and ex ante moral hazard. The second article ""Yes, no, perhaps - Explaining the Demand for Risk Classification Insurance"" examines the optimal risk classification in case the insured have incomplete private information regarding their future risk type. The third article ""The Demand for Enhanced Annuities"" analyzes the market reaction to the introduction of so-called enhanced annuities, which are annuities that take individual factors influencing life expectancy into account for pricing. The scientific dissertation is also of interest to insurance practitioners as it examines important issues in the field of health and life insurance product management."
Author : Joseph Orsini
Publisher :
ISBN 13 :
Total Pages : pages
Book Rating : 4.:/5 (939 download)
Download or read book Three Essays on the Economics of Health Insurance written by Joseph Orsini and published by . This book was released on 2015 with total page pages. Available in PDF, EPUB and Kindle. Book excerpt: This dissertation explores the functioning of the non-group health insurance market under various regulatory regimes. The first chapter estimates the relationship between health status and product choice in this market prior to the Affordable Care Act (ACA). I use insurers' decisions of whether to approve or reject applications for health insurance to identify this relationship. These decisions are based upon a comprehensive health history that the consumer must disclose to the insurer upon applying. I assume that the insurer uses this health history, as well as the financial characteristics of the product that was applied for, to estimate the expected cost of insuring the consumer, approving whenever this cost exceeds the product's premium. This assumption allows me to estimate how insurers' forecasts of applicants' costs differ depending on the type of product chosen in a discrete choice framework. I estimate that demanders of high deductible coverage are much costlier to insure than others. Additional analysis reveals that these consumers are likely to be impoverished, suggesting that cash constraints and/or price sensitivity may explain their preference for minimal coverage. The second chapter is co-authored with Pietro Tebaldi, and estimates the impact of age-based pricing restrictions in the post-reform market. The ACA fixes the ratio between health insurance premiums charged to consumers of different ages, which generates a relationship between the fraction of relatively old consumers in a geographic market and the prices faced by young consumers in that market. We show that this relationship is present in the prices faced by consumers on the ACA exchanges, but was not present in the pre-ACA market. We take this as evidence that the relationship between price and population age observed in the ACA data is indeed attributable to this regulation. We then use this variation, combined with a model of insurer price-setting, to back out the age-specific prices that would prevail if the regulation of interest were eliminated. We estimate that this regulation substantially raises premiums for younger buyers while reducing them for older buyers, and therefore alters the allocation of coverage to consumers of different ages. Because the value of the subsidies that the federal government provides is directly tied to premiums, this regulation has also had a substantial impact on the federal budget, decreasing subsidy outlays by approximately $2.3 billion. The final chapter is co-authored with Michael Dickstein, Mark Duggan, and Pieto Tebaldi, and explores another aspect of the ACA's pricing restrictions. Individual states have discretion in how they define coverage regions, within which insurers must charge the same premium to buyers of the same age, family structure, and smoking status. We exploit variation in these definitions to investigate whether the size of the coverage region affects outcomes in the ACA marketplaces. We find large consequences for small and rural markets. When states combine small counties with neighboring urban areas into a single region, the included rural markets see .6 to .8 more active insurers, on average, and savings in annual premiums of between $200 and $300.
Author :
Publisher :
ISBN 13 :
Total Pages : 294 pages
Book Rating : 4.:/5 (815 download)
Download or read book Essays on the Economics of Health Insurance written by and published by . This book was released on 2012 with total page 294 pages. Available in PDF, EPUB and Kindle. Book excerpt: This dissertation focuses on the economics of health insurance. In the first essay, I take advantage of discontinuities in the structure of Wisconsin's Medicaid program to identify the effects of cost-sharing on insurance status, utilization, and health outcomes for low-income families. I use a three year administrative panel of enrollment data and health insurance claims for the universe of enrollees to inform my estimates. I find that an increase in the premium from zero to ten dollars results in 1.4 fewer months enrolled and reduces the probability of a one year enrollment spell by 12 percentage points, but other discrete changes in premium amounts do not affect enrollment. Copayments for emergency department visits of $15-60 reduce total visits by as much as 50%, but the reductions come from both necessary and unnecessary care, implying a potentially negative effect on health. In the second essay, which is joint work with colleagues from Wisconsin's BadgerCare Plus evaluation team (Thomas DeLeire, Donna Friedsam, Daphne Kuo, Lindsey Leininger, Sarah Meier, and Kristen Voskuil), I use administrative data from Wisconsin to estimate the percent of individuals newly enrolled in public health coverage that had access to private, employer-sponsored health insurance at the time of their enrollment and the percent that was uninsured. We estimate that among all new enrollees approximately 21% had access to private health insurance at the time of enrollment and that only 10% dropped this coverage. The third essay considers that in markets for health insurance consumers may have private information about their health risk that leads to self-selection into more generous insurance plans. This phenomenon, known as adverse selection, can result in market failures. In joint work with Gaston Palmucci, I use individual-level claims data covering the universe of private insurance enrollees in Chile from 2006-2009 to investigate the potential for adverse selection in the Chilean market for private health insurance using traditional reduced form tests. The results indicate the presence of asymmetric information in Chile.
Author : Nathaniel Denison Mark
Publisher :
ISBN 13 :
Total Pages : pages
Book Rating : 4.:/5 (125 download)
Download or read book Three Essays on Access and Welfare in Health Care and Health Insurance Markets written by Nathaniel Denison Mark and published by . This book was released on 2021 with total page pages. Available in PDF, EPUB and Kindle. Book excerpt: We use a model of health plan choice and subsequent utilization to estimate household preferences in both markets and predict premiums and costs under a counterfactual pooled market. We find that integration mitigates adverse selection issues in the individual market, while decreasing government and employer expenditures on premium subsidies. Small group households benefit from lower premiums for low coverage plans in the merged market. However, they face higher premiums for high coverage plans and are constrained to a smaller set of insurance options. Thus, the effects of integration on small group households are heterogeneous.
Author : Shawn McFarland
Publisher :
ISBN 13 :
Total Pages : 0 pages
Book Rating : 4.:/5 (134 download)
Download or read book Two Essays on Price Limits and One Essay on Health Insurance written by Shawn McFarland and published by . This book was released on 2020 with total page 0 pages. Available in PDF, EPUB and Kindle. Book excerpt: The first two essays study the special quote (SQ) and limit up-limit down (LULD) rules. These rules are short duration price limits rules on the Tokyo Stock Exchange (SQ) and US stock exchanges (LULD). We present a novel research design where we create pseudo-event samples to test stock market behavior in the absence of these rules. The first essay examines price limit effects on delayed price discovery and the magnet effect. We find that neither SQ nor LULD delay price discovery. SQ exhibits evidence of the magnet effect at the upper price limit while LULD has no magnet effect. The second essay focuses on volatility spillover following a price limit event and microstructure noise during flash crashes. Consistent with previous findings regarding daily static price limits, we find little evidence that either SQ or LULD calm market volatility. Also, we find little evidence that LULD reduces intraday volatility during periods of extreme volatility such as flash crashes. The third essay strives to develop a more efficient, lower-cost health insurance/underwriting system. We divide healthcare coverage into three tiers. Tier 1 consists of low severity healthcare claims that occur regularly for essentially all people. Tier 2 covers relatively lower frequency and higher cost healthcare claims that present lower, more predictable underwriting risk and rarely involves prolonged, year to year, underwriting risks. Tier 3 involves catastrophic low frequency but high severity healthcare underwriting risks that may require larger volume insurers to achieve diversification through a more stable distribution of benefits. Tier 3 claims often result in the long term and expensive future healthcare needs risks often terminating with the death of the insured. We show empirically that annual health care expense is a function of claim frequency and claim severity. Further, we show that claim frequency and claim severity are interrelated and that their covariant relation is non-homogeneous across the entire distribution of health care claims. Finally, we show that by segmenting health care insurance underwriting based on these three tiers, cumulative health insurance premiums are reduced. We propose policy recommendations to address social interests including affordable care and universal coverage..
Author : Alexander Lee Olssen
Publisher :
ISBN 13 :
Total Pages : 142 pages
Book Rating : 4.:/5 (125 download)
Download or read book Essays on Industrial Organization and Health Care Markets written by Alexander Lee Olssen and published by . This book was released on 2021 with total page 142 pages. Available in PDF, EPUB and Kindle. Book excerpt: This thesis comprises three essays on the industrial organization of health care markets. In the first essay, joint with Mert Demirer, I study how formulary–contingent rebates affect insurers formulary placement of branded statins. The prices charged for on–patent, branded pharmaceuticals represent a large, and controversial, component of medical spending in the U.S. In contrast to many countries and many other government programs, drug prices in the Medicare Part D program are determined by privately negotiated rebates between insurance plans and drug manufacturers. How large are these rebates? What would happen to formularies, consumer surplus, and firm profits if the government could increase the rebates of a blockbuster Medicare Part D drug? We estimate a simultaneous model of insurance demand and statin demand for the population of statin users in 2010. Our demand estimates allow us to quantify how insurer profits change under different statin formulary structures. We use these profit functions to estimate the rebates for Crestor and Lipitor, two blockbuster drugs, using a moment inequality approach; we estimate rebates between 25% and 54% for branded statins. In counterfactuals, we analyze the effect of rebates on formulary design and consumer surplus. We show that increasing only Crestor rebates has no effect on consumer surplus because of offsetting effects on winners and losers. In contrast, increasing only Lipitor rebates does increase consumer surplus. If rebates reduced U.S. prices to match those paid in Canada, then consumer surplus would increase by up to 3.1% In the second essay, I compare estimates of formulary–contingent rebates using three empirical moment inequality models. Unobserved private rebates are an important determinant of the prices that insurers pay drug manufacturers in Medicare Part D. There is growing interest in understanding these negotiated rebates and there consequences on market equilibrium. However rebates are secret and have proven difficult to estimate. In this paper I compare three moment inequality models that I use to estimate formulary–contingent rebates for branded statins. The first model, which only allows for measurement error, imposes the strong assumption that their is no rebate heterogeneity that is unobserved to the econometrician. Due to the fact that different insurers use different agents (Pharmacy Benefit Mangers) in rebate negotiations, this assumption is unlikely to hold. As a consequence I develop two models that allow for unrestricted insurer–specific unobserved rebate heterogeneity. Somewhat surprisingly, the measurement errors only model produces reasonable results in this context, however the rebates for Lipitor are approximately twice as large in my preferred model relative to the measurement errors only model. In the third essay, also joint with Mert Demirer, I study the effects of government negotiated drug prices using Nash–in–Nash bargaining models. One of the most controversial aspects of Medicare Part D is that the government is prohibited from being involved in price negotiations despite the fact that it provides almost $100 billion to the program in subsidies each year. We model pharmaceutical drug price setting using Nash–in–Nash bargaining models. We compare two models: one where insurers negotiate drug prices and another where the government negotiates prices. We show that the ability for the government to improve consumer surplus depends on both upstream and downstream market structure. With many insurers and few drug manufacturers, the government can increase consumer surplus, but with few insurers the government cannot increase consumer surplus no matter how much bargaining power it has vis–a–vis drug manufacturers. We also show that a Nash–in–Nash bargaining model where insurers and drug manufacturers negotiate over both manufacturer prices and copays can be used to estimate unobservable manufacturer prices and bargaining weights as long as there are profit spillovers across bilateral negotiations.
Author : Andrew Olenski
Publisher :
ISBN 13 :
Total Pages : 0 pages
Book Rating : 4.:/5 (138 download)
Download or read book Essays on the Economics of Health Care Markets written by Andrew Olenski and published by . This book was released on 2023 with total page 0 pages. Available in PDF, EPUB and Kindle. Book excerpt: Our findings establish that insurers can affect health care well outside their direct purview, raising the question of how to match their private objectives with their scope of influence.
