Suboptimal provision of preventive healthcare due to expected enrollee turnover among private insurers.
Many preventive healthcare procedures are widely recognized as cost-effective but have relatively low utilization rates in the US. Because preventive care is a present-period investment with a future-period expected financial return, enrollee turnover among private insurers lowers the expected return of this investment. In this paper, I present a simple theoretical model to illustrate the suboptimal provision of preventive healthcare that results from insurers 'free riding' off of the provision from others. I also provide an empirical test of this hypothesis using data from the Community Tracking Study's Household Survey. I use lagged market-level measures of employment-induced insurer turnover to identify variation in insurers' expectations and test for the effect of turnover on several different measures of medical utilization. As expected, I find that turnover has a significantly negative effect on the utilization of preventive services and has no effect on the utilization of acute services used as a control.
Department of Health Policy and Management, Bloomberg School of Public Health, Johns Hopkins University, 624 North Broadway, Baltimore, MD 21205-1901, USA. bherring@jhsph.edu
Bradley
B
Herring
D000328:Adult; D003362:Cost-Benefit Analysis; D005260:Female; D019538:Health Care Surveys; D006801:Humans; D007348:Insurance, Health / Q000706:statistics & numerical data*; D008297:Male; D008875:Middle Aged; D008962:Models, Theoretical; D011314:Preventive Health Services / Q000706:statistics & numerical data*; D017149:Private Sector; D014481:United States; D055815:Young Adult