Category: Asymmetric Information

  • Patient Demand and Overuse of Prescription Drugs

    The concept of moral hazard is well-known. If patients pay a small share of drug or other medical cost, they may decide to overuse such services. Physicians, however, may also have an incentive to overprescribe if either their reimbursement is tied to prescriptions written. For instance, CMS pays physicians 103% of wholesale acquisition cost (WAC) […]

  • Patients aren’t great price shoppers

    That is the finding from a recent Health Affairs article by Desai et al. (2021). We launched a large online advertising campaign to increase consumers’ awareness about insurer-specific negotiated price information available on New Hampshire’s public price transparency website. Our campaign led to a more than 600 percent increase in visits to the website. However, in […]