Insurance is an extraordinarily useful tool to manage risk. When it works as intended, it provides financial protection to individuals and a profitable business model for insurance firms and their investors. But it is broadly misunderstood by consumers, regulators, and insurance executives. This book looks at the behavior of individuals at risk, insurance industry decision makers, and policy makers at the local, state, and federal level involved in the selling, buying, and regulating of insurance. It compares their actions to those predicted by benchmark models of choice derived from classical economic theory. When actual choices stray from predictions, the behavior is considered to be anomalous. With considerable sums of money at stake, both in consumer premiums and insurance company payouts, it is important to understand the reasons for anomalous behavior. Howard Kunreuther, Mark Pauly, and Stacey McMorrow examine these anomalies through the lens of behavioral economics, which takes into account emotions, biases, and simplified decision rules. The authors then consider if and how such behavioral anomalies could be modified to improve individual and social welfare. This book is neither a defense of the insurance industry nor an attack on it. Neither is it a consumer guide to purchasing insurance, although the authors believe that consumers will benefit from the insights it contains. Rather, this book describes situations in which both public policy and the insurance industry s collective posture need to change. This may require incentives, rules, and institutions to help reduce both inefficient and anomalous behavior, thereby encouraging behavior that will improve individual and social welfare.

How are the costs of health insurance premiums determined? Should costs vary according to indicators of risk? How much do premiums vary with risk? Do the healthy subsidize the unhealthy? Should public subsidies vary according to economic status and risk? This book examines these questions.

In this comprehensive volume, leading experts on health policy consider a broad range of Medicare-related issues. They assess the effects of Medicare policy over the last twenty years, analyze the impact of changing economic and demographic conditions, and consider how best to implement successful reform of the troubled system.

Preface - Notes on the Contributors - Introduction; J.Finsinger and M.V.Pauly - GREAT BRITAIN - Regulation of the UK Insurance Industry; J.Tapp - UNITED STATES OF AMERICA - Regulation and Quality Competition in the US Insurance Industry; M.Pauly, H.Kunreuther and P.Kleindorfer - GERMANY - A State Controlled Market: The German Case; J.Finsinger - SWEDEN - The Regulation of the Swedish Insurance Industry; K.Skogh - SWITZERLAND - Insurance Regulation in Switzerland: An Outline with Special Reference to Life and Motor Car Liability Insurance; C.B.Blankart and F.Schneider - Regulation Induced Price Instability in Swiss Motor Car Liability Insurance; C.B.Blankart and J.Finsinger - FRANCE - The French Automobile and Life Insurance Markets; J.Finsinger and R.Waldmann - The French Insurance Market; J-F.Outreville - CANADA - The Economics of Life Insurance Regulation; G.F.Mathewson and R.A.Winter - Descriptive Evidence on the Canadian Insurance Industry; G.F.Mathewson and R.A.Winter - Index

In this book, distinguished scholars Philip A. Rea, Mark V. Pauly, and Lawton R. Burns explore the science and management behind marketable biomedical innovations. They look at how the science actually played out through the interplay of personalities, the cultures within and between academic and corporate entities, and the significance of serendipity not as a mysterious phenomenon but one intrinsic to the successes and failures of the experimental approach. With newly aggregated data and case studies, they consider the fundamental economic underpinnings of investor-driven discovery management, not as an obstacle or deficiency as its critics would contend or as something beyond reproach as some of its proponents might claim, but as the only means by which scientists and managers can navigate the unknowable to discover new products and decide how to sell them so as to maximize the likelihood of establishing a sustainable pipeline for still more marketable biomedical innovations.

In this book, distinguished scholars Philip A. Rea, Mark V. Pauly, and Lawton R. Burns explore the science and management behind marketable biomedical innovations. They look at how the science actually played out through the interplay of personalities, the cultures within and between academic and corporate entities, and the significance of serendipity not as a mysterious phenomenon but one intrinsic to the successes and failures of the experimental approach. With newly aggregated data and case studies, they consider the fundamental economic underpinnings of investor-driven discovery management, not as an obstacle or deficiency as its critics would contend or as something beyond reproach as some of its proponents might claim, but as the only means by which scientists and managers can navigate the unknowable to discover new products and decide how to sell them so as to maximize the likelihood of establishing a sustainable pipeline for still more marketable biomedical innovations.

Insurance is an extraordinarily useful tool to manage risk. When it works as intended, it provides financial protection to individuals and a profitable business model for insurance firms and their investors. But it is broadly misunderstood by consumers, regulators, and insurance executives. This book looks at the behavior of individuals at risk, insurance industry decision makers, and policy makers at the local, state, and federal level involved in the selling, buying, and regulating of insurance. It compares their actions to those predicted by benchmark models of choice derived from classical economic theory. When actual choices stray from predictions, the behavior is considered to be anomalous. With considerable sums of money at stake, both in consumer premiums and insurance company payouts, it is important to understand the reasons for anomalous behavior. Howard Kunreuther, Mark Pauly, and Stacey McMorrow examine these anomalies through the lens of behavioral economics, which takes into account emotions, biases, and simplified decision rules. The authors then consider if and how such behavioral anomalies could be modified to improve individual and social welfare. This book is neither a defense of the insurance industry nor an attack on it. Neither is it a consumer guide to purchasing insurance, although the authors believe that consumers will benefit from the insights it contains. Rather, this book describes situations in which both public policy and the insurance industry s collective posture need to change. This may require incentives, rules, and institutions to help reduce both inefficient and anomalous behavior, thereby encouraging behavior that will improve individual and social welfare."

As Congress contemplates major revisions to America's health care system, two leading health economists warn that significant differences among state Medicaid programs will hinder national health care reform. Thomas W. Grannemann and Mark V. Pauly argue that Medicaid will need to be reformed as an early step in any serious health care reform effort. While states such as Mississippi and Nevada spend as little as $5,000 per poor person annually, New York and Alaska annually spend more than $15,000 per Medicaid patient. Large differences remain even after correcting for cost-of-living and medical-price differences. This imbalance among states creates an uneven and unstable foundation for any national program to address the needs of uninsured Americans. The authors offer principles for reform designed to encourage equity, efficiency, and accountability in all publicly funded health care programs. They suggest changes in provider payment methods and federal/state financing designed to promote interstate equity, equality of payment across settings, claims-based accountability, provider network control, and value-based cost containment. Such reform will require upfront changes in Medicaid to improve access to high-value health care for low-income persons (particularly those in low-Medicaid-benefit states) and to help slow the rate of growth in medical costs. These changes will level the playing field for state programs and provide a crucial foundation for further national reform.

Despite rising real incomes, the number of uninsured American workers and their dependents has not fallen appreciably. Policymakers in both political parties have considered the use of tax credits to encourage the purchase of private insurance coverage. This study analyzes the effects of a variety of forms of tax credits, especially for workers whose incomes place them above the poverty line but below the median family income -- a group in which the vast majority of the uninsured are to be found. The authors' conclusions differ from more conventional analyses in two ways. First, they find plausible effects on the numbers of uninsured persons that are larger than those of other studies. Second, they explore the distinction between the "cost" to the federal government of tax credits and the more relevant measures of tax credits' effects on aggregate economic welfare and cost to the economy. Nevertheless, they still find, as do most other analysts, that modest subvsidies will have little effect in reducing the number of the uninsured. For a given amount "spent" on credits, a key tradeoff exists between the breadth of the reduction in the uninsured and the depth of the increase in the coverage they take. While it is unlikely that the number of uninsured will ever be literally zero, the authors believe that carefully designed tax credits can both reduce the numbers of uninsured and improve the equity of tax treatment of the insured.

The 1990s saw no progress in the financing of health care. About 40 million Americans still have no health insurance including 22 percent of America's children and 19 percent of young adults. And an economic downturn brings with it increased numbers of uninsured. What can be done? Mark V. Pauly and John S. Hoff answer with a tax credit/voucher system introduced in a common-sense way, with as much simplicity and flexibility as possible. The United States can launch such a program immediately and make needed adjustments along the way. The use of the credit assists people in obtaining insurance and provides tax equity. The authors chronicle changes in U.S. attitudes about health care and in the economic environment, tackle design issues, and consider policy trade-offs and problems of the technicalities of such a program. They offer a sample tax-credit plan and respond to possible objections to their plan.

What new theories, evidence, andpolicies have shaped health economicsin the 21st century?

Editors Mark Pauly, Thomas McGuire, and Pedro Pita Barros assemblethe expertise of leading authoritiesin this survey ofsubstantive issues. In 16chapters theycover recent developments in health economics, from medical spending growth to the demand for health care, the markets for pharmaceutical products, the medical workforce, and equity in health and health care.Its global perspective, including an emphasis on low and middle-income countries, will result in the same high citations that made Volume 1 (2000) a foundational text.
Presents coherent summaries of major subjects and methodologies, marking important advances and revisions. Serves as a frequently used non-journal reference. Introduces non-economists to the best research in health economics. "