The moral hazard and preventive care

Mark Pauly (yes, that Mark Pauly) and colleagues have a new paper in Health Affairs:

Under the Affordable Care Act, preventive care measures, including vaccinations and screenings, recommended by the Advisory Committee on Immunization Practices and the US Preventive Services Task Force must be covered in full by insurance. These recommendations affect the cost of medical care. Yet neither organization explicitly incorporates measures of efficiency or cost-effectiveness in making its recommendations. To redress this shortcoming, we propose a decision-making framework for these two organizations based on the principles of economic efficiency. Our analysis suggests that routine use of a preventive service should be recommended for full insurance coverage if the service’s cost-effectiveness exceeds a socially determined threshold. For less cost-effective services, we suggest that information about effectiveness and cost should be provided to consumers by physicians or government, but the choice of care and insurance coverage for care should be made by individuals. For the least cost-effective services, the two organizations should discourage public and private insurers from covering such services and report their unfavorable cost-effectiveness.

Look, I think that the moral hazard is too loosely applied to health care, so I imagine on many points Pauly and I would disagree. But this isn’t one of them. I would absolutely like to see more discussions about cost-effectiveness in our recommendations and work. To that end, I have published research to make it easier for researchers to do that type of work in pediatrics.*

The paper is totally worth your time. You should go read it.


*This should please Austin, who thinks I don’t write enough about my own work. If there are any papers I’ve written that you would like to hear more about, tweet me and let me know.

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