Title

Patient Costs and Physicians’ Information

Author(s)

Michael J. Dickstein Michael Dickstein (New York University)

Jihye Jeon Jihye Jeon (Boston University)

Eduardo Morales Eduardo Morales (Princeton University)

Abstract

Health insurance plans in the U.S. increasingly use price mechanisms to steer demand for prescription drugs. The effectiveness of these incentives, however, depends both on physicians’ price sensitivity and their knowledge of patient prices. We develop a moment inequality model that allows researchers to identify agents’ preferences without fully specifying their information. Applying this model to diabetes care, we find that physicians lack detailed price information and are more price-elastic than full-information models imply. We predict that providing physicians detailed information on prices at the point of prescribing can save patients 12-23% of their out-of-pocket costs for diabetes treatment.

Creation Date

2023-12

Section URL ID

Paper Number

URL

https://economics.princeton.edu/working-papers/patient-costs-and-physicians-information/

File Function

Jel

C13, I13

Keyword(s)

moment inequalities, pharmaceutical markets, physician decision-making

Suppress

false

Series

13