Abstract:
:Many preventive healthcare procedures are widely recognized as cost-effective but have relatively low utilization rates in the US. Because preventive care is a present-period investment with a future-period expected financial return, enrollee turnover among private insurers lowers the expected return of this investment. In this paper, I present a simple theoretical model to illustrate the suboptimal provision of preventive healthcare that results from insurers 'free riding' off of the provision from others. I also provide an empirical test of this hypothesis using data from the Community Tracking Study's Household Survey. I use lagged market-level measures of employment-induced insurer turnover to identify variation in insurers' expectations and test for the effect of turnover on several different measures of medical utilization. As expected, I find that turnover has a significantly negative effect on the utilization of preventive services and has no effect on the utilization of acute services used as a control.
journal_name
Health Econjournal_title
Health economicsauthors
Herring Bdoi
10.1002/hec.1484subject
Has Abstractpub_date
2010-04-01 00:00:00pages
438-48issue
4eissn
1057-9230issn
1099-1050journal_volume
19pub_type
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