Distinguishing moral hazard from access for high-cost healthcare under insurance

Abstract

Health policy has long been preoccupied with the problem that health insurance stimulates spending ("moral hazard"). However, much health spending is costly healthcare that uninsured individuals could not otherwise access. Field studies comparing those with more or less insurance cannot disaggregate moral hazard versus access. Moreover, studies of patients consuming routine low-dollar healthcare are not informative for the high-dollar healthcare that drives most of aggregate healthcare spending in the United States. Methods We test indemnities as an alternative theory-driven counterfactual. Such conditional cash transfers would maintain an opportunity cost for patients, unlike standard insurance, but also guarantee access to the care. Since indemnities do not exist in U.S. healthcare, we fielded two blinded vignette-based survey experiments with 3,000 respondents, randomized to eight clinical vignettes and three insurance types. Our replication uses a population that is weighted to national demographics on three dimensions. Findings Most or all of the spending due to insurance would occur even under an indemnity. The waste attributable to moral hazard is undetectable. Conclusions For high-cost care, policymakers should be more concerned about the foregone efficient spending for those lacking full insurance, rather than the wasteful spending that occurs with full insurance.

Jump in Elective Total Hip and Knee Arthroplasty Numbers at Age 65 Years: Evidence for Moral Hazard?

“…17 It has been shown that the existence of readily available free care shifts individuals' behavior. 15,16 In general, the characteristics of those who opt to delay the procedure for either TKA or THA are as follows: Individuals who delay are more likely to be female and non-Hispanic White, have a lower functional status, be discharged to a nonhome facility, and have a longer LOS. Interestingly, those older than 65 years undergoing THA were more likely to have an ASA class of .3, but this was not notable in those undergoing TKA or the combined group.…”

“…13 - 15 In medicine, moral hazard is used to state that the availability of health insurance increases spending. 16 Classically, it states that individuals consume care indiscriminately because they are sheltered from its financial implications. It has been explored through differences in emergency department utilization in teenagers after ineligibility of their parents' health insurance.…”

“…17 It has been shown that the existence of readily available free care shifts individuals' behavior. 15 , 16 …”

Incidence of moral hazards among health care providers in the implementation of social health insurance toward universal health coverage: evidence from rural province hospitals in Indonesia

“…Moral hazard has preoccupied health economics and U.S. health policy for half a century (8). When Medicare providers' payment patterns changed to a prospective Diagnostic Related Groups (DRG) system in the United States, hospitals raised the patient's disease code to a higher level (up-coding).…”

Development of a predictive model for integrated medical and long-term care resource consumption based on health behaviour: application of healthcare big data of patients with circulatory diseases

“…With regard to the management of medical resources, it has become clear that adherence to medication and moral hazards among patients are closely related to clinical outcomes and have a significant impact not only on health behaviours but also on socioeconomic factors, including medical costs [ 10 , 11 ]. Improvements in medication adherence have been reported to reduce the economic burden as well as the burden of chronic disease on patients [ 12 ].…”