Insurance, Consumer Search, and Equilibrium Price Distributions

Akin, S. Nuray; Platt, Brennan C.

doi:10.1111/j.1539-6975.2013.01515.x

Cited by 6 publications

(6 citation statements)

References 37 publications

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“…Both Lieber (2017) and Brown (2017) suggest that the use of transparency tools would increase if individuals were more directly exposed to the price of health care services. This proposition is supported by theory modeled by Dionne and Eeckhoudt (1984) and Akın and Platt (2014). Brown (2016) estimates that if individuals had a 50 percent co-insurance rate, this would lead to a 38 percent increase in the number of consumers using price shopping tools.…”

Section: Appendix a Background On Cost Sharing Mri Scans And Agencymentioning

confidence: 78%

Are Health Care Services Shoppable? Evidence from the Consumption of Lower-Limb MRI Scans

Chernew

Cooper

Larsen-Hallock

et al. 2018

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We study how privately insured individuals choose lower-limb MRI scan providers. Despite significant out-of-pocket costs and little variation in quality, patients often received care in highpriced locations when lower priced options were available. The choice of provider is such that, on average, patients bypassed 6 lower-priced providers between their homes and treatment locations. We show that referring physicians heavily influence where patients receive care. The influence of referring physicians is dramatically greater than the influence of patient cost-sharing or patients' home zip code fixed effects. Patients with vertically integrated referring physicians are also more likely to receive costlier hospital-based scans.

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Section: Appendix a Background On Cost Sharing Mri Scans And Agencymentioning

confidence: 78%

Are Health Care Services Shoppable? Evidence from the Consumption of Lower-Limb MRI Scans

Chernew

Cooper

Larsen-Hallock

et al. 2018

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“…Those companies who have a good market image charge more for their services. Customers tend to pay more against the services offered if the firm has an excellent reputable image in the market (Akin and Platt, 2014). Still, this type of relationship does not last long, as the customer will switch to other options in the market.…”

Section: Moderating Role Of Corporate Imagementioning

confidence: 99%

“…Those firms who are providing competitive services at economical prices win customer satisfaction. Other scholars further elaborated on the economic cost and included the cost of searching and evaluating the other benefits before the buying decision (Kotler et al , 2012; Akin and Platt, 2014). The higher the benefits customer perceived, the higher the customer perception of value will be for the services or goods used from the total costs of goods (Mahamad and Ramayah, 2010; Ahmad et al , 2018b).…”

Section: Theoretical Background and Concept Developmentmentioning

confidence: 99%

Forging customer satisfaction through commitment-trust factors in financial insurance services: moderating role of corporate image

Saoula

Abid

Ahmad

et al. 2023

JIMA

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Purpose It is widely evident that trust and commitment are important pillars for strengthening the relationship between financial service firms and their customers. However, it has not been explored how the service quality, perceived cost and role of agents are important for financial service firms. To overcome this gap, this study aims to investigate the role of service quality, perceived cost and the role of agents as the commitment–trust factors in the financial insurance service (Takaful) in Malaysia, enhancing customer satisfaction. Design/methodology/approach The study follows a quantitative design in which primary data was collected using a survey instrument. The measurement instrument was adapted from the previous research, and data were collected from 264 customers of the Takaful financial service organizations in Malaysia. The data were analyzed using variance-based structural equational modeling in Smart-PLS software. Findings This research has revealed several useful insights that demonstrate a significant impact on service quality, perceived cost and the agents’ role in forging close relationships with their customers. Corporate image has a moderating role in relationships and has significantly impacted takaful insurance companies. The results imply that regardless of the corporate image of the financial service organizations, customers are concerned about the prices and the quality of the agents’ services. Research limitations/implications In this study, only the predictors such as service quality, perceived costs and agents’ roles as trust–commitment factors were examined to determine customer satisfaction. Other investigations are highly recommended, such as value co-creation in takaful, takaful customer experience and takaful trust. This study offers insights to takaful insurance companies on how to keep up a positive corporate image, which will boost their trust–commitment factors and ultimately increase customer satisfaction. Originality/value By presenting commitment–trust factors and company image in an identifiable framework, the current study has expanded the discussion on takaful financial insurance services. The methodology is developed and rigorously tested to gauge customer satisfaction in takaful financial service organizations’ context.

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“…Dionne (1981) first discussed how this type of moral hazard is distinct from other forms of moral hazard (e.g., Pauly 1968;Ehrlich and Becker 1972). It was further studied theoretically (Dionne 1984;Akin and Platt 2014), but has received very little empirical attention because data on search are rare.…”

Section: Moral Hazard In Searchmentioning

confidence: 99%

“…A prominent, yet largely untested, explanation is moral hazard in search (Dionne 1981(Dionne , 1984Akin and Platt 2014). Health insurance reduces consumers' exposure to price differences and thereby reduces their incentives to search.…”

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confidence: 99%

Does It Pay to Know Prices in Health Care?

Lieber

2017

American Economic Journal: Economic Policy

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H ealth care spending accounts for 18 percent of the United States economy and has grown faster than GDP in 42 of the past 50 years. As a result, containing health care costs has become a primary concern of public policy as well as the private sector. Unlike most markets, consumers know very little about prices in health care. Research in other markets has found that increasing price transparency reduces prices (e.g., Brown and Goolsbee 2002; Goldmanis et al. 2010), but it is not clear the same will be true in health care: health insurance insulates patients from prices, reducing the benefits of switching to a lower priced provider.In this paper, I estimate whether access to and use of price information affects the prices paid for medical care. I use a unique dataset in which the employees of a large firm gain access to price information provided by Compass Professional Health Services (Compass hereafter). The novel feature of the data is a direct measure of search: Compass tracks the use of its price information and so directly measures search.I begin by estimating how access to price information affects the prices paid for care. A subset of the employees were given access to price information in a pilot program to determine whether it was worth purchasing for all of the employees. The employees who gained access early did not sign up, volunteer, or select into the pilot program in any way; they were given access early because they worked for the company's corporate offices. I estimate a differences-in-differences model that takes advantage of this variation in access both across groups and over time. The results suggest that access to price information reduces the average price paid by

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Insurance, Consumer Search, and Equilibrium Price Distributions

Cited by 6 publications

References 37 publications

Are Health Care Services Shoppable? Evidence from the Consumption of Lower-Limb MRI Scans

Are Health Care Services Shoppable? Evidence from the Consumption of Lower-Limb MRI Scans

Forging customer satisfaction through commitment-trust factors in financial insurance services: moderating role of corporate image

Does It Pay to Know Prices in Health Care?

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