Price Sensitivity in Health Care: Implications for Health Policy, Second Editiion uri icon


  • The purpose of this monograph is to inform policy debates over health care by summarizing what we know about the functions of the health services and health insurance markets in the United States. The monograph does three things: (1) it describes the nature of the health care and health insurance markets in the U.S. from the point of view of the purchasers of services, (2) it reviews the existing literature on the extent to which consumers have been responsive to changes in prices and premiums, and (3) it proposes changes in the health services and health insurance markets that would enhance the role of the price system. These issues are at the heart of discussions over the future of health care costs and access. If consumers are responsive to medical care prices and buy less when faced with higher prices, then escalating costs can be controlled by providing consumers with incentives to pay higher out-of-pocket prices for care and with better information on the quality of providers, the prices they charge, and the effectiveness of their services. If consumers are responsive to the prices of health insurance plans, then savings from plan changes will find their way to consumers, and the subsidized premiums can be used to expand access to needed coverage.

author list (cited authors)

  • Morrisey, M. A.