Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/208425 
Year of Publication: 
1999
Series/Report no.: 
Working paper No. 3-2000
Publisher: 
Copenhagen Business School (CBS), Department of Economics, Frederiksberg
Abstract: 
In this paper, the reimbursement of spending on medicin is considered as a problem of insurance, where the loss due to illness of the insured is covered totally or partially by an insurance company (which may be the government). The presence of moral hazard (in the form of the individual patient’s own effort to reduce cost by avoiding unnecessary medicination and choosing the cheapest drugs) implies that an optimal insurance will have less than total coverage of the patient outlays. The insurance approach to drug subsidization indicates that reimburse-ment should vary with the type of medicin rather than with accumulated pa-tient outlays. Also, secondary investment covering the remaining part of the patient’s outlays, a feature of the reimbursement system in some countries, is suboptimal.
Subjects: 
insurance companies
health care
JEL: 
I10
I19
I30
Persistent Identifier of the first edition: 
Creative Commons License: 
cc-by-nc-nd Logo
Document Type: 
Working Paper

Files in This Item:
File
Size





Items in EconStor are protected by copyright, with all rights reserved, unless otherwise indicated.