Paying on the Margin for Medical Care: Evidence from Breast Cancer Treatments
We present a simple graphical framework to illustrate the potential welfare gains from a "top-up" health insurance policy requiring patients to pay the incremental price for more expensive treatment options. We apply this framework to breast cancer treatments, where lumpectomy with radiati...
| Main Authors: | , , |
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| Other Authors: | |
| Format: | Article |
| Language: | en_US |
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American Economic Association
2017
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| Online Access: | http://hdl.handle.net/1721.1/106819 https://orcid.org/0000-0002-9941-6684 https://orcid.org/0000-0003-4364-1505 |
| _version_ | 1826188799537840128 |
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| author | Einav, Liran Finkelstein, Amy Williams, Heidi L |
| author2 | Massachusetts Institute of Technology. Department of Economics |
| author_facet | Massachusetts Institute of Technology. Department of Economics Einav, Liran Finkelstein, Amy Williams, Heidi L |
| author_sort | Einav, Liran |
| collection | MIT |
| description | We present a simple graphical framework to illustrate the potential welfare gains from a "top-up" health insurance policy requiring patients to pay the incremental price for more expensive treatment options. We apply this framework to breast cancer treatments, where lumpectomy with radiation therapy is more expensive than mastectomy but generates similar average health benefits. We estimate the relative demand for lumpectomy using variation in distance to the nearest radiation facility, and estimate that the "top-up" policy increases social welfare by $700-2,500 per patient relative to two common alternatives. We briefly discuss additional tradeoffs that arise from an ex ante perspective. (JEL G22, I11, I13, I18) |
| first_indexed | 2024-09-23T08:05:13Z |
| format | Article |
| id | mit-1721.1/106819 |
| institution | Massachusetts Institute of Technology |
| language | en_US |
| last_indexed | 2024-09-23T08:05:13Z |
| publishDate | 2017 |
| publisher | American Economic Association |
| record_format | dspace |
| spelling | mit-1721.1/1068192022-09-30T07:24:56Z Paying on the Margin for Medical Care: Evidence from Breast Cancer Treatments Einav, Liran Finkelstein, Amy Williams, Heidi L Massachusetts Institute of Technology. Department of Economics Finkelstein, Amy Williams, Heidi L We present a simple graphical framework to illustrate the potential welfare gains from a "top-up" health insurance policy requiring patients to pay the incremental price for more expensive treatment options. We apply this framework to breast cancer treatments, where lumpectomy with radiation therapy is more expensive than mastectomy but generates similar average health benefits. We estimate the relative demand for lumpectomy using variation in distance to the nearest radiation facility, and estimate that the "top-up" policy increases social welfare by $700-2,500 per patient relative to two common alternatives. We briefly discuss additional tradeoffs that arise from an ex ante perspective. (JEL G22, I11, I13, I18) National Institute on Aging (Grant R01-AG032449) National Science Foundation (U.S.) (Grant 1151497) 2017-01-31T21:33:32Z 2017-01-31T21:33:32Z 2016-02 Article http://purl.org/eprint/type/JournalArticle 1945-7731 1945-774X http://hdl.handle.net/1721.1/106819 Einav, Liran, Amy Finkelstein, and Heidi Williams. “Paying on the Margin for Medical Care: Evidence from Breast Cancer Treatments.” American Economic Journal: Economic Policy 8.1 (2016): 52–79. © 2016 American Economic Association https://orcid.org/0000-0002-9941-6684 https://orcid.org/0000-0003-4364-1505 en_US http://dx.doi.org/10.1257/pol.20140293 American Economic Journal: Economic Policy Article is made available in accordance with the publisher's policy and may be subject to US copyright law. Please refer to the publisher's site for terms of use. application/pdf American Economic Association American Economic Association |
| spellingShingle | Einav, Liran Finkelstein, Amy Williams, Heidi L Paying on the Margin for Medical Care: Evidence from Breast Cancer Treatments |
| title | Paying on the Margin for Medical Care: Evidence from Breast Cancer Treatments |
| title_full | Paying on the Margin for Medical Care: Evidence from Breast Cancer Treatments |
| title_fullStr | Paying on the Margin for Medical Care: Evidence from Breast Cancer Treatments |
| title_full_unstemmed | Paying on the Margin for Medical Care: Evidence from Breast Cancer Treatments |
| title_short | Paying on the Margin for Medical Care: Evidence from Breast Cancer Treatments |
| title_sort | paying on the margin for medical care evidence from breast cancer treatments |
| url | http://hdl.handle.net/1721.1/106819 https://orcid.org/0000-0002-9941-6684 https://orcid.org/0000-0003-4364-1505 |
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