Five questions for health economists
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Five questions for health economists Randall P. Ellis
Received: 20 August 2012 / Published online: 4 September 2012 © Springer Science+Business Media New York 2012
Keywords Health economics · Behavioral economics · Insurance · Primary care · Risk adjustment JEL Classification
I10 · I11 · I13
I had a lot of fun deciding what I wanted to talk about in front of this very distinguished audience of the American Society of Health Economists. I will be raising five questions for health economists that are intended to provoke discussion and perhaps foster future research. I propose these without claiming them to be exhaustive or the most important set of questions, only that they are an interesting set. The examples and facts presented are drawn largely from my own research, but also rely upon the research of others. Without further ado, let me get started. My first question is
Q1: If the ceiling in this room fell down and permanently paralyzed both of your legs, what type of health insurance coverage would you want? After recovering from the unpleasantness of this scenario, you might decide that this is a very silly question. You would of course say that you want to be in a health plan with very complete coverage, with low copayments and deductibles, and few, if any, restrictions on your choice of providers. Remarkably, a majority of US health economists and policy makers are working to ensure that you are not offered such a generous plan, because it costs too much.
This paper is a written version of the Presidential Address of Randall Ellis, presented on June 11, 2012 at the fourth biennial conference of the American Society of Health Economists (ASHEcon) at the Carlson School of Management of the University of Minnesota in Minneapolis. R. P. Ellis (B) Boston University, Boston, MA, USA e-mail: [email protected]
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This serious injury would also have many other effects. Some of you would change your careers or drop out of the labor force, jeopardizing your access to employer-sponsored insurance. The effects on your lifestyle would be dramatic as well. At a minimum this serious injury would require fundamental changes in your living arrangements, commuting, work, travel, and social activities. In almost every case your income would go down substantially, whether due to your changed occupation, your reduced ability to travel, or the huge amount of time that you would spend in treatment and traveling to physical therapy. The time cost and inconvenience of having to pay your share of health care costs and the anxiety of worrying about what services your health plan will cover will impose other burdens. It is interesting to consider how a health economist would think about this traumatic lifestyle change. Many of you would probably say that your preferences for medical care would change. Would you agree?1 It might seem like your preferences would suddenly change, but that would be wrong, or at least misleading. What you would experience is primarily a change in the state of the world that you live in, n
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