Economics Research Seminarhttps://weatherhead.case.edu/events/2014/04/01/economics-research-seminar
In response to the rise in health spending in the US, which totaled nearly $9000 per
capita in 2012, insurers and government payers use two mechanisms to direct spending toward the most valuable treatments. The rst set, \demand-side" incentives, impose costs on the patient to limit moral hazard. The second set, "supply-side" incentives, use the physician's payment as a tool to minimize agency conflicts. I design a new test of the relative eectiveness of these two avenues in maximizing the value of treatment choices. Using variation in patients' and physicians' exposure to incentives, I find new evidence that physician-directed incentives may raise long-run costs. Physicians reduce oce-based primary care in response to new payment regimes, substituting prescription drugs as well as referrals for speciality care. Short-run costs fall, but patients relapse at higher rates. I discuss the likely mechanism generating this trade-o and its implication for disease-specic insurance design.
Please join the Economics Department for a research seminar. This event is open to all Case Western Reserve University faculty, Ph.D. students, economic majors and minors, and those interested in economics research.
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