More from these Authors

• Other Article | Quartz | February 14, 2019

  We Should Treat Algorithms like Prescription Drugs

  Andy Coravos, Irene Chen, Ankit Gordhandas and Ariel Dora Stern

  Citation:

  Coravos, Andy, Irene Chen, Ankit Gordhandas, and Ariel Dora Stern. "We Should Treat Algorithms like Prescription Drugs." Quartz (February 14, 2019).  View Details

  CiteView Details Read Now

  Related

• Chapter | Handbook of Behavioral Economics | 2019

  Behavioral Economics and Health-Care Markets

  Amitabh Chandra, Benjamin Handel and Joshua Schwartzstein

  This chapter summarizes research in behavioral health economics, focusing on insurance markets and product markets in health care. We argue that the prevalence of choice difficulties and biases leading to mistakes in these markets establish a special place for them in economic analysis. In addition, we argue that while the behavioral health-economics literature has done a better job documenting consumer-choice mistakes in insurance and treatment choices than explaining why those mistakes occur, it is clear that we should not ignore these mistakes in our analyses. We document evidence showing that consumers leave lots of money on the table in their insurance-plan choices, sometimes thousands of dollars. This is true both when consumers make active choices (e.g., they do not have a default plan) and when they make passive choices (e.g., they have a default plan). We discuss the implications of this body of work for the design and regulation of insurance markets, including the interaction between consumer choice difficulties or biases and adverse selection. We then document evidence on consumer mistakes in health-care utilization and treatment choices, especially in response to changes in prices such as copayments and deductibles. We show how choice difficulties or biases may lead patients to respond to such increases in patient cost-sharing by reducing demand for high-value care, muddying the traditional argument that the price elasticity of demand for medical care meaningfully captures the degree of moral hazard. We conclude with directions for future research.

  Keywords: Behavioral economics; Consumer Behavior; Economics; Health Care and Treatment; Insurance; Markets;

  Citation:

  Chandra, Amitabh, Benjamin Handel, and Joshua Schwartzstein. "Behavioral Economics and Health-Care Markets." In Handbook of Behavioral Economics: Foundations and Applications 2, edited by B. Douglas Bernheim, Stefano DellaVigna, and David Laibson. Amsterdam: Elsevier/North-Holland, 2019.  View Details

  CiteView Details Read Now

  Related

• Article | American Economic Journal: Economic Policy | February 2019

  Physician Beliefs and Patient Preferences: A New Look at Regional Variation in Health Care Spending

  David Cutler, Jonathan Skinner, Ariel Dora Stern and David Wennberg

  There is considerable controversy about the causes of regional variations in health care expenditures. Using vignettes from patient and physician surveys linked to fee-for-service Medicare expenditures, this study asks whether patient demand-side factors or physician supply-side factors explain these variations. The results indicate that patient demand is relatively unimportant in explaining variations. Physician organizational factors matter, but the most important factor is physician beliefs about treatment. In Medicare, we estimate that 35% of spending for end-of-life care and 12% of spending for heart attack patients (and for all enrollees) is associated with physician beliefs unsupported by clinical evidence.

  Keywords: Health Care and Treatment; Spending; Geographic Location; Values and Beliefs;

  Citation:

  Cutler, David, Jonathan Skinner, Ariel Dora Stern, and David Wennberg. "Physician Beliefs and Patient Preferences: A New Look at Regional Variation in Health Care Spending." American Economic Journal: Economic Policy 11, no. 1 (February 2019): 192–221.  View Details

  CiteView DetailsFind at Harvard

  Related