Let Them Have Choice: Gains from Shifting Away from Employer-Sponsored Health Insurance and Toward an Individual Exchange

Dafny, Leemore; Ho, Katherine; Varela, Mauricio

doi:10.1257/pol.5.1.32

Cited by 36 publications

(21 citation statements)

References 26 publications

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“…14 Insurance coverage is usually generous, and consumers will face only a small fraction of a branded statin's $3/day price tag. Consumers in employer-sponsored insurance tend to have a limited number of choices (Dafny, Ho and Varela 2013) and are unlikely to select into insurance plans based on their coverage or cost sharing for particular drugs.…”

Section: Demandmentioning

confidence: 99%

Ask Your Doctor? Direct-to-Consumer Advertising of Pharmaceuticals

Sinkinson¹,

Starc

2015

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We measure the impact of direct-to-consumer television advertising (DTCA) by drug manufacturers. Our identification strategy exploits shocks to local advertising markets generated by idiosyncrasies of the political advertising cycle as well as a regulatory intervention affecting a single product. We find that a 10% increase in the number of a firm's ads leads to a 0.76% increase in revenue, while the same increase in rival advertising leads to a 0.55% decrease in firm revenue. Results also indicate that a 10% increase in category advertising produces a 0.2% revenue increase for non-advertised drugs. Both the business-stealing and spillover effects would not be detected through OLS. Decomposition using micro data confirms that the effect is due mostly to new customers as opposed to switching among current customers. Simulations show that an outright ban on DTCA would have modest effects on the sales of advertised drugs as well as on non-advertised drugs.

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Section: Demandmentioning

confidence: 99%

Ask Your Doctor? Direct-to-Consumer Advertising of Pharmaceuticals

Sinkinson¹,

Starc

2015

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“…Given those preference estimates, we then use choices in the pre-reform period to estimate the process driving the consideration set formation. Within the health care literature, Ho (2006) and Dafny, Ho and Varela (2013) also analyze the effect of removing choice constraints. However, in their settings the constrained choice sets are observed in the data and the papers evaluate the welfare effect of their removal in a counterfactual.…”

mentioning

confidence: 99%

Free to Choose? Reform, Choice, and Consideration Sets in the English National Health Service

Gaynor

Propper

Seiler

2016

American Economic Review

151

108

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Choice in public services is controversial. We exploit a reform in the English National Health Service to assess the effect of removing constraints on patient choice. We estimate a demand model that explicitly captures the removal of the choice constraints imposed on patients. We find that, post-removal, patients became more responsive to clinical quality. This led to a modest reduction in mortality and a substantial increase in patient welfare. The elasticity of demand faced by hospitals increased substantially post-reform and we find evidence that hospitals responded to the enhanced incentives by improving quality. This suggests greater choice can raise quality. JEL: D12, I11, I18, L13, L30

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“…Several studies have found that employees are generally sensitive to premium prices, a sensitivity that declines as employees age or experience longer job tenure or more health issues (Atherly, Curtis, and Thorpe 2005;Beaulieu 2002;Royalty and Solomon 1999;Strombom, Buchmueller, and Feldstein 2002;Wedig and Tai-Seale 2002)-behavior that could be explained as a desire to stick with a given insurer's provider network, or as an inertia effect. Overall, these results could mean that smaller choice sets yield more market-oriented behavior, findings that are contradicted by Dafny, Ho, and Varela (2010), who note several studies showing that price sensitivity declines in other large employer samples.…”

Section: Individual Insurance Markets Abroadmentioning

confidence: 76%

Consumer Choice in Health Insurance Exchanges: Can We Make It Work?

Nadash¹,

Day²

2014

Journal of Health Politics, Policy and Law

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Under the Patient Protection and Affordable Care Act (ACA), consumer choice plays a critical role: it drives the competitive market in health insurance plans that will operate through health insurance exchanges. As the 2014 deadline for establishing exchanges approaches, states face choices: they can either allow the federal government to manage an exchange on their behalf; take on a minimalist role by managing a state exchange or partnering with the federal exchange; or assume an activist role--by aiming to influence the price, design, and quality of the health insurance options available through exchanges and taking steps to support consumers' ability to choose among these options. This article discusses states' choices and the governance issues that they raise, first by describing the extent of discretion that states have in shaping the range of health plans on offer as well as the issues they will need to consider in choosing an exchange model. We then discuss the considerable body of evidence that addresses how people behave in individual insurance markets, concluding that it strongly supports the need for states to take an active role in shaping health insurance exchanges and ensuring that they support consumer choice.

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Let Them Have Choice: Gains from Shifting Away from Employer-Sponsored Health Insurance and Toward an Individual Exchange

Cited by 36 publications

References 26 publications

Ask Your Doctor? Direct-to-Consumer Advertising of Pharmaceuticals

Ask Your Doctor? Direct-to-Consumer Advertising of Pharmaceuticals

Free to Choose? Reform, Choice, and Consideration Sets in the English National Health Service

Consumer Choice in Health Insurance Exchanges: Can We Make It Work?

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