of health insurance. We show that any innovation worth buying reduces overall risk, thereby generating positive insurance …Economists think of medical innovation as a valuable but risky good, producing health benefits but increasing financial … risk. This perspective overlooks how innovation can lower physical risks borne by healthy patients facing the prospect of …

Innovation is part idea generation and part development. We build a model of "innovating-by-doing," whereby ideas come … to practitioners. Successful innovation requires that practitioners' ideas be developed through costly effort. Our model ….S. Medicare program on medical equipment innovation. Our model’s structure allows us to infer the Medicare program's aggregate …

value of medical innovation due to risk aversion. I show that insurance value is highest for rare diseases, where afflicted …Traditional value of medical innovation models estimate the benefits of a new treatment to individuals who fall sick ex …-post. However, economic theory suggests medical innovation has additional benefits ex-ante - before susceptible individuals know …

This paper studies the interactions between health insurance and the incentives for innovation. Although we focus on … pharmaceutical innovation, our discussion applies to other industries producing novel technologies for sale in markets with … inadequate incentives to innovate. Standard results in the health literature suggest that health insurance leads to the …

This paper studies the interactions between health insurance and the incentives for innovation. Although we focus on … pharmaceutical innovation, our discussion applies to other industries producing novel technologies for sale in markets with … inadequate incentives to innovate. Standard results in the health literature suggest that health insurance leads to the …