Paying on the Margin for Medical Care: Evidence from Breast Cancer Treatments

Liran Einav, Amy Finkelstein and Heidi Williams ()

American Economic Journal: Economic Policy, 2016, vol. 8, issue 1, 52-79

Abstract: 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)

JEL-codes: G22 I11 I13 I18 (search for similar items in EconPapers)
Date: 2016
Note: DOI: 10.1257/pol.20140293
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Citations: View citations in EconPapers (13)

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Related works:
Working Paper: Paying on the Margin for Medical Care: Evidence from Breast Cancer Treatments (2014)
Working Paper: Paying on the margin for medical care: Evidence from breast cancer treatments (2014)
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