EC781 Health Economics

SSW Room 546; 11-12:30pm MW

Albert Ma
Room 557
270 Bay State Road


Health Care, Insurance, Moral Hazard and Adverse Selection

Kenneth J. Arrow, 1963, “The Welfare Economics of Medical Care,” American Economic Review, 53, 941-973

Zeckhauser, Richard, 1970, “Medical Insurance: A Case Study of the Tradeoff between Risk Spreading and Appropriate Incentives,” Journal of Economic Theory, 2, 10-26

Pauly, Mark, 1968, “The Economics of Moral Hazard: Comment,” American Economic Review, 58, 531-537

Ma, Ching-to Albert and Michael H. Riordan, 2002, “Health Insurance, Moral Hazard, and Managed Care,” Journal of Economics & Management Strategy, 11, 81-107

Blomqvist, Ake, 1997, “Optimal non-linear health insurance,” Journal of Health Economics, 16, 303 – 321

Akerlof, George, 1970, “The Market for Lemons: Qualitative Uncertainty and the Market Mechanism,” Quarterly Journal of Economics, 84(3), 488-500

Rothschild, Michael and Joseph E. Stiglitz, 1976, “Equilibrium in Competitive Insurance Markets: An Essay on the Economics of Imperfect Information,” Quarterly Journal of Economics (90(4), 630-649

Villeneuve, Bertrand, 2005, “Competition between Insurers with Superior Information,” European Economic Review, 321-340.

Chade, Hector and Edward Schlee, 2012, “Optimal Insurance with Adverse Selection,” Theoretical Economics 7, 571-607.

Chiappori, Pierre-Andre, and Bernard Salanie, 2000, “Testing for Asymmetric Information in Insurance Markets,” Journal of Political Economy, 108, 56-78.

De Meza, David and David C. Webb, 2001, “Advantageous Selection in Insurance Markets,” Rand Journal of Economics, 32, 249-262.

Einav, Liran, and Amy Finkelstein, 2011, “Selection in Insurance Markets: Theory and Empirics in Pictures,” Journal of Economic Perspectives, 25, 115-138.

Hendren, Nathaniel, 2014, “Unraveling versus Unraveling: A Memo on Competitive Equilibria and Trade in Insurance Markets,” Geneva Risk And Insurance Review, 39, 176-183.

Hendren, Nathaniel, 2013, “Private Information and Insurance Rejections,” Econometrica 81, 1713-1762.


The Patient-Physician Interaction

Dranove, David, 1988, “Demand Inducement and the Physician/Patient Relationship,” Economic Inquiry, 26, 251-298

Rochaix, Lise, 1989, “Information Asymmetry and Search in the Market for Physician Services,” Journal of Health Economics, 8, 53-84.

Ma, Ching-to Albert and Thomas G. McGuire, 1997, “Optimal Health Insurance and Provider Payment,” American Economic Review, 87, 685-704.

Jack, William, 2005, “Purchasing health care services from providers with unknown altruism,” Journal of Health Economics, 24, 73-94.

Chone, Philippe and Ching-to Albert Ma, 2011, “Optimal Health Care Contracts under Physician Agency,” Annales d'Economie et de Statistique, Number 101/102, January/June, 229-256.

Liu, Ting and Ching-to Albert Ma, 2013, “Health Insurance, Treatment Plan, and Delegation to Altruistic Physician,” Journal of Economic Behavior & Organization, 85, 79-96.

Barham, Victoria and Olga Milliken, 2015, “Payment Mechanisms and the Composition of Physician Practices: Balancing Cost-containment, Access, and Quality of Care,” Health Economics, 24, 895-906.

Hennig-Schmidt, Heike, Reinhard Selten, and Daniel Wiesen, 2011, “How Payment Systems Affect Physicians’ Provision Behaviour—An Experimental Investigation,” Journal of
Health Economics 32, 637-646.

Hennig-Schmidt, Heike, and Daniel Wiesen, 2014, “Other-regarding behavior and motivation in health care provision: An experiment with medical and non-medical students,” Social Science & Medicine, 108, 156-165.

Godager, Geir, and Daniel Wiesen, 2013, “Profit or patients’ health benefit” Exploring the heterogeneity in physician altruism,” Journal of Health Economics, 32, 1105-1116.

Godager, Geir, Ching-to Albert Ma, and Daniel Wiesen, 2015, “Competition and Physician Altruism: A Laboratory Experiment,” working paper.

Mimra, Wanda, Alexander Rasch, and Christian Waibel, 2015, “Second Opinions in Markets for Expert Services: Experimental Evidence,” ETH Zurich working paper.


Provider Payment and Incentives

Ellis, Randall P. and Thomas G. McGuire, 1986, “Provider Behavior under Prospective Reimbursement: Cost Sharing and Supply,” Journal of Health Economics, 5, 129-151.

Ellis, Randall P. and Thomas G. McGuire, 1990, “Optimal Payment System for Health Services,” Journal of Health Economics, 9, 375-396.

Ma, Ching-to Albert, 1994, “Health Care Payment Systems: Cost and Quality Incentives,” Journal of Economics & Management Strategy, 3, 93-112

Ma, Ching-to Albert, 1998, “Cost and Quality Incentive in Health Care: A Reply,” Journal of Economics & Management Strategy, 7, 139-142, 1998.

Ma, Ching-to Albert and Henry Y. Mak, 2014, “Information Disclosure and the Equivalence of Prospective Payment and Cost Reimbursement,” working paper.

Bardey, David, Chiara Canta, and Jean-Marie Lozachmeur, 2012, “The Regulation of Health Care Providers’ Payments when Horizontal and Vertical Differentiation Matter,” Journal of Health Economics, 31, 691-704.

Barros, Pedro Pita, 2003, “Cream-skimming, Incentives for Efficiency and Payment System,” Journal of Health Economics, 22, 419-443.


Selection and Risk Adjustment

Jacob Glazer, and Thomas G. McGuire, 2000, “Optimal Risk Adjustment in Markets with Adverse Selection: An Application to Managed Care,” American Economics Review, 90, 1055-1071.

Glazer, Jacob, and Thomas G. McGuire, 2006, “Optimal Quality Reporting in Markets for Health Plans,” Journal of Health Economics, 25, 295-310

Bijisma, Michiel, Jan Boone, and Gijsbert Zwart, 2014, “Competition Leverage: How the Demand Side Affects Optimal Risk Adjustment,” Rand Journal of Economics, 45, 792-815.

David M. Cutler and Sarah Reber, 1998, “The Tradeoff between Competition and Adverse Selection,” Quarterly Journal of Economics, 113, 433-466.

Miller, Nolan, 2005, “Health Benefits and Wages: Minimizing Total Compensation Cost,” Journal of Health Economics, 24, 931-949.

Lorenz, Normann, 2015, “The interaction of Direct and Indirect Risk Selection,” Journal of Health Economics, 42, 81-89.

Quality Competition in the Health Care Market

Ching-to Albert Ma and Jim Burgess, 1993, “Quality Competition, Welfare, and Regulation,” Zeitschrift fur Nationalokonomie, Journal of Economics, Vol. 58, 153-173.

Pedro Pita Barros and Xavier Martinez-Giralt, 2002, “Public and Private Provision of Health Care,” Journal of Economics & Management Strategy, 11, 109-134

Biglaiser, Gary, and Ching-to Albert Ma 2003, “Price and Quality Competition under Adverse Selection: Market Organization and Efficiency,” Rand Journal of Economics, 34, 266-286.

Bardey, David, and Jean-Charles Rochet, 2010, “Competition among Health Plans: a Two-Sided Market Approach,” Journal of Economics & Management Strategy, 19, 435-451.

Olivella, Pau, and Marcos Vera-Hernandez, 2007, “Competition among Differentiated Health Plans under Adverse Selection,” Journal of Health Economics, 26, 233-250.

Laine, Liisa, and Ching-to Albert Ma, 2015, “Quality and Competition between Private and Public Firms,” Boston University working paper.


Managed Care and Health Maintenance Organization

Richard G. Frank, Jacob Glazer, Thomas G. McGuire, 2000 “Measuring Adverse Selection in Managed Health Care,”, Journal of Health Economics, 19, 829-854.

Ma, Ching-to Albert, 2004 “Managed Care and Shadow Price,” Health Economics, 13, 199-202.

Malcomson, James, 2004 “Health Service Gatekeepers,” Rand Journal of Economics, 35, 401-421.

Brekke, Kurt R., Robert Nuscheler and Odd Rune Straume, 2007, “Gatekeeping in Health Care,” Journal of Health Economics, 26, 149-170.

Dranove, David, and Kathryn E. Spier, 2003, “A Theory of Utilization Review,” BE Journal of Economic Analysis and Policy, Contribution, available on-line at

Ma, Ching-to Albert and Thomas G. McGuire, 2002, “Network Incentives in Managed Health Care,” Journal of Economics & Management Strategy, 11, 1-36.

Miller, Nolan, 2006, “Insurer-provider Integration, Credible Commitment, and Managed-care Backlash,” Journal of Health Economics, 25, 861-876.


Public and Private Health Care

Blackorby, Charles and David Donaldson, 1988, “Cash versus Kind, Self-Selection, and Efficient Transfer” American Economic Review, 78, 691-700.

Besley, Timothy and Stephen Coate, 1991, “Public Provision of Private Goods and The Redistribution of Income,” American Economic Review, 81, 979-984.

Pita Barros, Pedro, and Pau Olivella, 2005, “Waiting Lists and Patient Selection,” Journal of Economics & Management Strategy, 14, 623-646.

Gonzalez, Paula, 2004 “Should Physicians’ Dual Practice be Limited? An Incentive Approach,” Health Economics, 13: 505-524

Biglaiser, Gary and Ching-to Albert Ma, 2007, “Moonlighting: Public Service and Private Practice,” Rand Journal of Economics, 38, 1113-1133.

Gonzalez, Paula and Ines Macho-Stadler, 2013, “A Theoretical Approach to Dual Practice Regulations in the Health Sector,” Journal of Health Economics, 32, 66-87.

Ma, Ching-to Albert, 2003, “Public Rationing and Private Cost Incentives,” Journal of Public Economics, 88, 333-352.

Hoel, Michael, 2007, “What Should (Public) Health Insurance Cover?” Journal of Health Economics, 26, 251-262.

Grassi, Simona, and Ching-to Albert Ma, 2012, “Public Section Rationing and Private Sector Selection,” Journal of Public Economic Theory, Vol. 14, 1-34.

Grassi, Simona and Ching-to Albert Ma, 2011, “Optimal Public Rationing and Price Response,” Journal of Health Economics, Vol. 30, 1197-1206.