EC781 Health Economics

270 Bay State Road, Room 315; MW 2-3:15pm

Office hours: Monday 3:30-5pm, Thursday 2-3:30pm, or by appointment

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

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

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

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

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, 2017, “False Diagnosis: Pitfalls of Testing for Asymmetric Information in Insurance Markets,” Economic Journal, 127, 2358-2377.

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.

Olivella, Pau, and Luigi Siciliani, 2017, “Reputational Concerns with Altruistic Providers,” Journal of Health Economics, 55, 1-13.

Pflum, Kevin, 2015, “Physician Incentives and Treatment Choice,” Journal of Economics & Management Strategy, 24, 712-51.

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 and Henry Y. Mak, 2017, “Incentives in Health Care Payment Systems,” to be revised for the Oxford Research Encyclopedia of Economics and Finance.

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, 2015, “Information Disclosure and the Equivalence of Prospective Payment and Cost Reimbursement,” Journal of Economic Behavior & Organization, 117, 439–452.

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

Mak, Henry Y., 2017, “Provider Performance Reports and Consumer Welfare,” Rand Journal of Economics, 48, 250-280

Mak, Henry Y., 2018, “Managing Imperfect Competition by Pay for Performance and Reference Pricing,” Journal of Health Economics, 57, 131-146.


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.

Green, Ellen P., 2014, “Payment Systems in the Healthcare Industry: An Experimental Study of Physician Incentives, “ Journal of Economics Behavior & Organization, 106, 367-378.

Kesternich, Iris, Heiner Schumacher, and Joachim Winter, 2016, “Professional Norms and Physician Behavior: Homo Oeconomicus or Homo Hippocraticus?” Journal of Public Economics 131, 1-11.

Experimental and Behavioral Economics of Healthcare Experimental and Behavioral Economics of Healthcare; Journal of Economic Behavior & Organization, Volume 131, Part B, Pages A1-A4, 1-208 (November 2016), Edited by James C. Cox, Ellen P. Green and Heike Hennig-Schmidt.

Gottschalk, Felix, Wanda Mimra, and Christian Waibel, 2017 “Health Services as Credence Goods: A Field Experiment,” ETH Zurich working paper.

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.

Fang, Hanming, Michael Keane and Dan Silverman, 2008, “Sources of Advantageous Selection: Evidence from the Medigap Insurance Market,” Journal of Political Economy, 2008, 303-350.

Einav, Liran, Amy Finkelstein, Stephen Ryan, Paul Schrimpf, and Mark Cullen, 2013, “Selection on Moral Hazard in Health Insurance,” American Economic Review, 178-219

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, 2016, “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.

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

Frandsen, Brigham, and James B. Rebitzer, 2014, “Structuring Incentives within Accountable Care Organizations,” Journal of Law, Economics, and Organization, 31 S1, i77-i103.

Grassi, Simona and Ching-to Albert Ma, 2016, “Information Acquisition, Referral, and Organization,” Rand Journal of Economics, 47, 935-960.