The Interaction between Forms of Insurance Contract and Types of Technical Change in Medical Care
The RAND Journal of EconomicsPublished 1 January 1991
James R. Baumgardner
Citations118
SJR quartileQ1
SJR score4.17
SNIP2.43
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TL;DR
A simple three-parameter description of medical technology is introduced to investigate the relationships between technical change, welfare, and type of insurance contract and results open the way for a positive model of the effects of insurance arrangements on the types of technology that are adopted and the effect of technical changes on the prevalent forms of Insurance contract.
Abstract
A simple three-parameter description of medical technology is introduced to investigate the relationships between technical change, welfare, and type of insurance contract. The value of a particular change in technology depends on the existing form of contract. The marginal equilibrium expected utility to consumers of different types of technical change hinges on the manner in which the insurance arrangement is designed to mitigate moral hazard. These results open the way for a positive model of the effects of insurance arrangements on the types of technology that are adopted and the effects of technical changes on the prevalent forms of insurance contract.
Keywords
Economics, Econometrics and FinanceHealth Professions
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