Optimal quality, waits and charges in health insurance

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We examine the role of quality and waiting time in health insurance when there is ex post moral hazard. Quality and waiting time provide additional instruments to control demand and potentially can improve the trade-off between optimal risk bearing and optimal consumption of health care. We show that optimal quality is lower than it would be in the absence of ex post moral hazard. But it is never optimal to have a positive waiting time if the marginal cost of waiting is higher for patients with greater benefits from health care. (C) 2007 Elsevier B.V. All rights reserved.

Original languageEnglish
Pages (from-to)663-674
Number of pages12
JournalJournal of health economics
Issue number3
Publication statusPublished - May 2008


  • quality
  • waiting times
  • rationing
  • optimal pricing
  • insurance
  • CARE

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