ABSTRACT
One common theme among health policy studies is that people respond to incentives as rational beings (Ellis and McGuire, 1996; Yip and Eggleston, 2004; Chalkley and Tilley, 2006: Godager et al., 2009). Indeed, a recent edited volume (Sloan and Kasper, 2008) carries the title “Incentives and Choice in Healthcare.” Consumers of healthcare services respond to price signals; suppliers of health-care services as well as private insurers respond to profit incentives; insurers have invented devices like co-payments and deductibles to control and manage expenses, taking advantage of people’s natural incentives. Insurers often rely on the services of designated doctors to serve as gatekeepers to contain escalating costs and to deal with the tendency of patients to over-utilize publicly subsidized services. Insurers also often collaborate with health service providers to form HMO-like organizations to deal with the diverse goals of caregivers as “agents” and insurers as “principal.” These responses appear to transcend social situations and political regimes.
