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A vast body of empirical evidence has accumulated demonstrating that incentives affect health care choices made by both consumers and suppliers of health care services. Decisions in health care are affected by many types of incentives,such as the rate of return pharmaceutical manufacturers expect on their investments in research and development, or disincentives, such as increases in copayments patients must make when they visit physicians or are admitted to hospitals. In this volume, leading scholars in health economics review these new and important results and describe their own recent research assessing the role of incentives in health care markets and decisions people make that affect their personal health. The contexts include demand decisions—choices made by individuals about health care services they consume and the health insurance policies they purchase—and supply decisions made by medical students, practicing physicians, hospitals, and pharmaceutical manufacturers. Researchers and students of health economics and policy makers will find this book a valuable resource, both for learning economic concepts, particularly as they apply to health care, and for reading up-to-date summaries of the empirical evidence. General readers will find the book's chapters accessible, interesting, and useful for gaining an understanding of the likely effects of alternative health care policies.ContributorsHenry J. Aaron, Ernst R.
Berndt, John Cawley, Julie M. Donohue, Donna Gilleskie, Brian R. Golden, Gautam Gowrisankaran, Chee-Ruey Hsieh, Hirschel Kasper, Thomas G. McGuire, Joseph P.
Newhouse, Sean Nicholson, Mark V. Pauly, Anna D. Sinaiko, Frank SloanFrank A. Sloan is J. Alexander McMahon Professor of Health Policy and Management and Professor of Economics at Duke University. He is the coauthor of The Price of Smoking (MIT Press,2004) and author or editor of many other books on health economics. Hirschel Kasper is Professor of Economics at Oberlin College.
1 Introduction Frank A. Sloan Sloan, Frank A. Hirschel Kasper Kasper, Hirschel 1
2 To Find the Answer, One Must Know the Question: Health Economics and Public Policy Henry J. Aaron Aaron, Henry J. 21
3 Health Capital: Theory and Empirical Evidence Donna Gilleskie Gilleskie, Donna 51
4 What We Know and Don't Know about the Effects of Cost Sharing on the Demand for Medical Care-and So What? Joseph P. Newhouse Newhouse, Joseph P. Anna D. Sinaiko Sinaiko, Anna D. 85
5 Adverse Selection and Moral Hazard: Implications for Health Insurance Markets Mark V. Pauly Pauly, Mark V. 103
6 Direct-to-Consumer Advertising in Health Care: An Overview of Economic Issues Ernst R. Berndt Berndt, Ernst R. Julie M. Donohue Donohue, Julie M. 131
7 Reefer Madness, Frank the Tank, or Pretty Woman: To What Extent Do Addictive Behaviors Respond to Incentives? John Cawley Cawley, John 163
8 Medical Career Choices and Rates of Return Sean Nicholson Nicholson, Sean 195
9 The Effects of Incentives on Pharmaceutical Innovation Frank A. Sloan Sloan, Frank A. Chee-Ruey Hsieh Hsieh, Chee-Ruey 227
10 Physician Fees and Behavior: Implications for Structuring a Fee Schedule Thomas G. McGuire McGuire, Thomas G. 263
11 Physician Pay for Performance: Alternative Perspectives Brian R. Golden Golden, Brian R. Frank A. Sloan Sloan, Frank A. 289
12 Competition, Information Provision, and Hospital Quality Gautam Gowrisankaran Gowrisankaran, Gautam 319
13 Summing Up Frank A. Sloan Sloan, Frank A. Hirschel Kasper Kasper, Hirschel 353