Preventive versus Curative Medicine: A Policy Exercise for the Classroom

Ann Helwege

The Journal of Economic Education, 1996, vol. 27, issue 1, 59-71

Abstract: This classroom example shows students that neither a health insurer (which bears only the hospitalization costs of acute care) nor the patient (who incurs lost earnings and psychic costs) has an adequate incentive to pay for preventive care, even though the total benefits of such care exceed its cost. The activity offers an application of concepts of efficiency, equity, present value, and moral hazard.

Date: 1996
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DOI: 10.1080/00220485.1996.10844895

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