Health insurance as a two-part pricing contract

• 成果类型: Article
• 署名作者: Lakdawalla, Darius; Sood, Neeraj
• 署名单位: University of Southern California; National Bureau of Economic Research
• 刊物名称: JOURNAL OF PUBLIC ECONOMICS
• ISSN/ISSBN: 0047-2727
• DOI: 10.1016/j.jpubeco.2013.03.001
• 发表日期: 2013
• 页码: 1-12
• 关键词: MARKET POWER; health insurance

摘要

Monopolies appear throughout health care. We show that health insurance operates like a conventional two-part pricing contract that allows monopolists to extract profits without inefficiently constraining quantity. When insurers are free to offer a range of insurance contracts to different consumer types, health insurance markets perfectly eliminate deadweight losses from upstream health care monopolies. Frictions limiting the sorting of different consumer types into different insurance contracts restore some of these upstream monopoly losses, which manifest as higher rates of uninsurance, rather than as restrictions in quantity utilized by insured consumers. Empirical analysis of pharmaceutical patent expiration supports the prediction that heavily insured markets experience little or no efficiency loss under monopoly, while less insured markets exhibit behavior more consistent with the standard theory of monopoly. (C) 2013 Elsevier B.V. All rights reserved.