Health insurance and diversity of treatment : a policy mix perspective

We determine the optimal health policy mix when the average utility of patients increases with the supply of drugs available in a therapeutic class. Health risk coverage rely on two instruments, copayment and reference pricing, that affect the supported risk composed by health expenses and diversity...

Full description

Autores:
Bardey, David
Jullien, Bruno
Lozachmeur, Jean-Marie
Tipo de recurso:
Work document
Fecha de publicación:
2013
Institución:
Universidad de los Andes
Repositorio:
Séneca: repositorio Uniandes
Idioma:
eng
OAI Identifier:
oai:repositorio.uniandes.edu.co:1992/8376
Acceso en línea:
http://hdl.handle.net/1992/8376
Palabra clave:
Diversity of treatments
Drugs' price regulation
Health insurance
Seguros de salud
Servicios de salud - Precios
I18, L11, L15, L51
Rights
openAccess
License
http://creativecommons.org/licenses/by-nc-nd/4.0/
Description
Summary:We determine the optimal health policy mix when the average utility of patients increases with the supply of drugs available in a therapeutic class. Health risk coverage rely on two instruments, copayment and reference pricing, that affect the supported risk composed by health expenses and diversity of treatment. For a fixed supply of drugs, the reference pricing policy aims at minimizing expenses in which case, the equilibrium price of drugs is independent of the copayment rate. However, with endogenous supply of drugs, diversity of treatment may susbtitute for insurance so that the reference pricing may depart from maximal cost-containement to promote entry. We then analyse the determinents of the optimal policy. While an increase in risk aversion or in the side effect loss increases diversity and decreases the copayment rate, an increase in entry cost both decreases diversity and the copayment rate.