What does the demand curve for medical care measure?
In summary, we stand by our method of using the consumer's willingness to pay for medical care to measure consumer surplus. We have not doubt that consumers' decisions will change as the science of medical effectiveness improves and results are disseminated to consumers and physicians. However, we never expect to see an exact correspondence between consumers' decisions and experts' advice. We believe that measurement of consumer welfare should be based on the consumer's valuation of the advice, not the advice itself. Finally, we note that if there is an inefficiently low level of information in medical care markets, the solution is to inform consumers, not to insure them fully.
Institute for Health Services Research, University of Minnesota, Minneapolis 55455.
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R
Feldman
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Dowd
D003256:Community Participation / Q000191:economics; D017047:Cost Sharing; D006301:Health Services Needs and Demand / Q000191:economics*; D006302:Health Services Research / Q000379:methods*; D007348:Insurance, Health / Q000706:statistics & numerical data; D017059:Models, Econometric; D012946:Social Welfare / Q000191:economics; D016896:Treatment Outcome; D014481:United States