بیمه سلامت و رقابت ناقص در بازار مراقبت از سلامت

We show that when health care providers have market power and engage in Cournot competition, a competitive upstream health insurance market results in over-insurance and over-priced health care. Even though consumers and firms anticipate the price interactions between these two markets – the price set in one market affects the demand expressed in the other – Pareto improvements are possible. The results suggest a beneficial role for Government intervention, either in the insurance or the health care market.

This paper considers the interplay between the insurance and health care markets. Feldstein (1970) was the first to note that widespread health insurance leads to increases in the price of health care, which in turn undermines the value of insurance. He conjectured that if “insurance coverage were reduced, the utility loss from increased risk would be more than outweighed by the gain due to lower prices” (p. 251). It was left to Chiu (1997) to demonstrate formally how this possibility might occur. Chiu considers the case of completely inelastic supply of health care, so that health care consumption is fixed. In this case, health care price inflation completely destroys the value of any coinsurance subsidy. However, there is little empirical support for the extreme inelasticity of health care supply required for the Feldstein–Chiu result. Our analysis generates the same conclusion, but under the more plausible assumption of Cournot pricing in the health care market. Like Chiu, we assume a competitive insurance industry. Both markets equilibrate simultaneously, as the price of health care affects the demand for insurance, and conversely, insurance coverage affects the Cournot equilibrium price of health care. Participants in each market take the price set in the other as given, in the manner of Nash equilibrium. Price expectations are rational (i.e., confirmed in equilibrium). Market power in the health care market is shown to be exacerbated by the feedback into insurance demand, leading to high health care prices and excessive insurance coverage. Consumers would be better off by collectively reducing their level of coverage, since the resulting reduction in health care price more than off-sets the increase in risk, exactly as predicted by Feldstein. The reason that the competitive insurance market fails in the face of health care supplier market power is that individual insurers do not take account of the reactions of health care suppliers to their action. Two related papers are Gaynor et al. (2000) and Wigger and Anlauf (2001). Gaynor et al. assume exogenous pricing of health care, and show that lower prices improve consumer welfare, after taking into account the insurance market response. However, as they do not endogenize health care prices, Gaynor, Haas-Wilson and Vogt cannot address the question of how exogenous reductions in coinsurance rates affect consumer welfare. Wigger and Anlauf do extend the Gaynor, Haas-Wilson paper and derive a special case of our result, with a monopoly provider and more restrictions on the utility function. We generalise these papers by considering consumer welfare under Cournot competition (with monopoly as a special case).

This paper shows that pecuniary externalities from health insurance are always present when health care markets are imperfectly competitive, and imply that competitive insurance markets do not maximize consumer welfare and excessive coverage is provided. This market failure only disappears when the health care market is itself perfectly competitive. There are two broad policy options for the government. Firstly, it could intervene in the health care market to make it more competitive or to regulate price so as to prevent insurance induced price inflation. Secondly, government could regulate the insurance market by taking over the provision of health insurance or restricting its quality (k). The government can also eliminate the tax sheltering for health insurance provided in some jursidictions such as the US and Australia. Our results also have implications for recent moves by the US Medicare system to include pharmaceuticals in its insurance scheme, and for the Australian policy of expanding private health insurance cover. These policies will lead to health care price inflation and may well leave consumers worse off. Furthermore, a testable implication of our analysis is that health care prices ought to be lower for public health care systems that prohibit private supplementary insurance than for similarly sized systems that permit supplementary insurance. Indeed, this may well be one of the factors driving higher pharmaceutical prices in the US. A study by Pavenik (2002) provides empirical support for our prediction that a fall in coinsurance rates leads to an increase in health care prices. She uses a unique German policy experiment from 1989. Prior to 1989, patients paid a fixed out-of-pocket amount for pharmaceuticals, regardless of the drug price. From 1989 onwards, the German government introduced an additional co-payment for drugs sold above a reference price. This introduced a kink into the demand curve at the reference price, with demand being perfectly inelastic below this point and elastic above it. The effect of the regime change was to reduce pharmaceutical prices by between 10 and 26%. Suppliers in more competitive drug markets – those facing more competition from generics – responded with a larger drop in prices. While the net effect on the German consumer was higher out-of-pocket payments – and therefore higher health expenditure risk – our results suggest that the policy may nevertheless have been welfare improving.