Journal of health economics
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Health insurance companies curb price-insensitive behavior and the moral hazard of insureds by means of cost-sharing, such as tiered co-payments or reference pricing in drug markets. This paper evaluates the effect of price limits - below which drugs are exempt from co-payments - on prices and on demand. ⋯ Second, estimating a nested-logit demand model, we show that consumers appreciate co-payment exempt drugs and calculate lower price elasticities for brand-name drugs than for generics. This explains the different price responses of brand-name and generic drugs and shows that price-related co-payment tiers are an effective tool to steer demand to low-priced drugs.
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We estimate the effect of county-level e-cigarette indoor vaping restrictions on adult prenatal smoking and birth outcomes using United States birth record data for 7 million pregnant women living in places already comprehensively banning the indoor use of traditional cigarettes. We use both cross-sectional and panel data to estimate our difference-in-difference models. Our panel model results suggest that adoption of a comprehensive indoor vaping restriction increased prenatal smoking by 2.0 percentage points, which is double the estimate obtained from a cross-sectional model. We also document heterogeneity in effect sizes along lines of age, education, and type of insurance.
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Many competitive health insurance markets adjust payments to participating health plans according to their enrollees' risk - including based on diagnostic information. We investigate responses of German health plans to the introduction of morbidity-based risk adjustment in the Statutory Health Insurance in 2009, which triggers payments based on "validated" diagnoses by providers. ⋯ This increase appears to originate from both a shift from not-validated toward validated diagnoses and an increase in the number of such diagnoses. Overall, our results indicate that plans were successful in influencing physicians' coding practices in a way that could lead to higher payments.