Abstract
Health care finance has been dominated by moral hazard, potential rents and the deadweight loss from financing them, and adverse selection. Public health services and insurance tend to be universal, solving the selection problem. Private health insurance markets and public schemes that offer a choice of insurance plans generally exhibit selection. Research has found strong evidence of responsiveness of demand to insurance coverage. In health insurance markets information is asymmetric among patients, providers, and insurers, and principal–agent relationships abound. Actual health insurance and health care financing institutions have adapted to these features.
This is a preview of subscription content, log in via an institution.
Buying options
Tax calculation will be finalised at checkout
Purchases are for personal use only
Learn about institutional subscriptionsBibliography
Akerlof, G. 1970. The ‘market for lemons’: Qualitative uncertainty and the market mechanism. Quarterly Journal of Economics 74: 488–500.
Arrow, K. 1963. Uncertainty and the welfare economics of medical care. American Economic Review 53: 941–973.
Chalkley, M., and J. Malcolmson. 1998. Contracting for health services when patient demand does not reflect quality. Journal of Health Economics 17: 1–19.
Chalkley, M., and J. Malcolmson. 2000. Government purchasing of health services. In Handbook of health economics, 1Ath ed, ed. A. Culyer and J. Newhouse. North-Holland: Amsterdam.
Cochrane, J. 1995. Time consistent health insurance. Journal of Political Economy 103: 445–473.
Cutler, D. 1994. A guide to health care reform. Journal of Economic Perspectives 8(3): 13–29.
Cutler, D. 2004. Your money or your life: Strong medicine for America’s health care system. New York: Oxford University Press.
Cutler, D., and S. Reber. 1998. Paying for health insurance: The tradeoff between competition and adverse selection. Quarterly Journal of Economics 113: 433–466.
Cutler, D., and R. Zeckhauser. 2000. The anatomy of health insurance. In Handbook of health economics, vol. 1A, ed. A. Culyer and J. Newhouse. Amsterdam: North- Holland.
Cutler, D., M. McClellan, and J. Newhouse. 2000. How does managed care do it? RAND Journal of Economics 31: 526–548.
Dubey, P., and J. Geanakoplos. 2002. Competitive pooling: Rothschild–Stiglitz reconsidered. Quarterly Journal of Economics 117: 1529–1570.
Ellis, R., and T. McGuire. 1986. Provider behavior under prospective reimbursement. Journal of Health Economics 5: 129–151.
Glied, S. 2000. Managed care. In Handbook of health economics, vol. 1A, ed. A. Culyer and J. Newhouse. Amsterdam: North-Holland.
Gruber, J. 2000. Health insurance and the labor market. In Handbook of health economics, vol. 1A, ed. A. Culyer and J. Newhouse. Amsterdam: North-Holland.
Hickson, G., W. Altmeier, and J. Perrin. 1987. Physician reimbursement by salary or fee-for-service: Effect on physician practice behavior in a randomized prospective study. Pediatrics 80: 344–350.
Krasnik, A., et al. 1990. Changing remuneration systems: Effects on activity in general practice. British Medical Journal 300: 1698–1701.
Manning, W., et al. 1987. Health insurance and the demand for medical care: Results from a randomized experiment. American Economic Review 77: 251–277.
McGuire, T. 2000. Physician agency. In Handbook of health economics, vol. 1A, ed. A. Culyer and J. Newhouse. Amsterdam: North-Holland.
Medicare Payment Advisory Commission. 2000. Report to the congress: Improving risk adjustment in medicare. Washington, DC: Medicare Payment Advisory Commission.
Newhouse, J. 1992. Medical care costs: How much welfare loss? Journal of Economic Perspectives 6(3): 3–21.
Newhouse, J. 1996. Reimbursing health plans and health providers: Selection versus efficiency in production. Journal of Economic Literature 34: 1236–1263.
Newhouse, J. 2002. Pricing the priceless: A health care conundrum. Cambridge, MA: MIT Press.
Newhouse, J., and the Insurance Experiment Group. 1993. Free for All? Lessons from the RAND health insurance experiment. Cambridge, MA: Harvard University Press.
Pauly, M. 2000. Insurance reimbursement. In Handbook of health economics, vol. 1A, ed. A. Culyer and J. Newhouse. Amsterdam: North-Holland.
Rothschild, M., and J. Stiglitz. 1976. Equilibrium in competitive insurance markets: An essay on the economics of imperfect information. Quarterly Journal of Economics 90: 629–650.
Wilson, C. 1977. A model of insurance markets with incomplete information. Journal of Economic Theory 16: 167–207.
Zeckhauser, R. 1970. Medical insurance: A case study of the tradeoff between risk spreading and appropriate incentives. Journal of Economic Theory 2: 10–26.
Zweifel, P., and W. Manning. 2000. Moral hazard and consumer incentives in health care. In Handbook of health economics, vol. 1A, ed. A. Culyer and J. Newhouse. Amsterdam: North-Holland.
Author information
Authors and Affiliations
Editor information
Copyright information
© 2018 Macmillan Publishers Ltd.
About this entry
Cite this entry
Newhouse, J.P. (2018). Health Insurance, Economics of. In: The New Palgrave Dictionary of Economics. Palgrave Macmillan, London. https://doi.org/10.1057/978-1-349-95189-5_2241
Download citation
DOI: https://doi.org/10.1057/978-1-349-95189-5_2241
Published:
Publisher Name: Palgrave Macmillan, London
Print ISBN: 978-1-349-95188-8
Online ISBN: 978-1-349-95189-5
eBook Packages: Economics and FinanceReference Module Humanities and Social SciencesReference Module Business, Economics and Social Sciences