This paper uses data on the abnormal returns earned by the shareholders of Texaco and Pennzoil to examine whether resources were quot;lostquot; in the course of the litigation. We find that the leakage involved in the forced transfer is enormous: each dollar of value lost by Texaco's...

Individual choice over health insurance policies may result in risk-based sorting across plans. Such adverse selection induces three types of losses: efficiency losses from individuals being allocated to the wrong plans; risk sharing losses since premium variability is increased; and losses from...

Standard theories of insurance, dating from Rothschild and Stiglitz (1976), stress the role of adverse selection in explaining the decision to purchase insurance. In these models, higher risk people buy full or near-full insurance, while lower risk people buy less complete coverage, if they buy...

Why do indemnity insurance plans cost substantially more per capita—77% more in our study—than HMOs? We answer this question using data from a large organization’s insurance pool, covering 215,000 lives. We decompose cost differences for eight major medical conditions into...

We study the impact of economic crisis on health in Mexico. There have been four wide-scale economic crises in Mexico in the past two decades, the most recent in 1995–96. We find that mortality rates for the very young and the elderly increase or decline less rapidly in crisis years as...

A puzzling feature of many medical innovations is that they simultaneously appear to reduce unit costs and increase total costs. We consider this phenomenon by examining the diffusion of percutaneous transluminal coronary angioplasty (PTCA)—a treatment for coronary artery...

Background: The increased use of medical therapies has led to increased medical costs. To provide insight into the value of this increased spending, we compared gains in life expectancy with the increased costs of care from 1960 through 2000. Methods: We estimated life expectancy in 1960, 1970,...

Objective. To determine the impact of rising health insurance premiums on coverage rates. Data Sources & Study Setting. Our analysis is based on two cohorts of nonelderly Americans residing in 64 large metropolitan statistical areas (MSAs) surveyed in the Current Population Survey in...