Dong, Yaohui (2018) Essays in Health Economics. Toulouse School of Economics (Toulouse).

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Abstract

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This thesis investigates several topics in health economics, and each of the three chapters is a self-contained paper. It aims to contribute to the design of health care systems and provides suggestions to policy makers. The first two chapters comes from my job market paper entitled "Reference Dependent Decisions on Noncommunicable Diseases: Prevention, Treatment and Optimal Health Insurance". In Chapter 1, I develop a reference dependent theory that accounts for people’s decisions on their prevention and treatment of noncommunicable diseases. Patients are predicted to have the same willingness to pay for the treatment of NCDs, and to go bankrupt if the willingness to pay exceeds their income.It imposes more realistic assumptions of health decisions, and the reference dependent theory better fits people’s decision patterns regarding NCDs. It also leads to different policy implications regarding the design of social insurance. Chapter 2 is the application of the theory in the design of social health insurance. It investigates how individuals with reference dependent preferences respond to various forms of social insurance. It shows that health insurance with copays can either encourage or discourage prevention, even when the efforts are not observable to the insurance provider. Moreover, deductible insurance is found to be financially unfeasible with ex-post moral hazard. The chapter then derives the analytical results of optimal social health insurance with the presence of ex-ante and ex-post moral hazard. The inverse relationship between income and prevention serves as a justification of redistribution. The third chapter, co-authored with Catarina Goulão, studies the impact of patient mobility on different health care systems that compete using waiting time and price respectively. We use a Hotelling model with two regions with different types of public health care systems to study the impact of patient mobility on their interaction, and on the regional welfare. We first characterize the autarky scenarios where patient mobility is no allowed, and shows that price and waiting time have different welfare impacts on regional welfare. We then explore equilibrium price and waiting time if patient mobility is allowed, and compare with the autarky scenario, and discuss the possible impacts on regional welfare.