Venue: The Fuqua School of Business, Duke University, 1 Towerview Drive, Durham, NC 27708-0120

 

Presentation

Rebate Later or Discount Directly

Authors: Yi-Chen Hong (Chinese Culture University); Chin-Hung Lin (Taipei City Hospital)

Presenter: Yi-Chen Hong (Chinese Culture University)

Session: Poster Session

Room: Kirby Winter Garden

When: Monday 2:30 p.m. - 3:15 p.m.

Rationale: Health economics is concerned with minimizing the increment of drug spending to mitigate patients' moral hazard. Health insurance mechanisms include co-payment and coinsurance. However, drug spending has inflated and co-payment has also become more expensive. Drug rebate would be a good alternative where, patients settle all the expenses at first, with a guarantee of a refund from their insurance after a period of time.

Objectives: This study was conducted to compare and analyze the efficiency between two mechanisms (co-payment and drug rebate).

Methodology: Use theoretical analysis to present the different patients' behaviors in two mechanisms.

Results: The drug rebate could deflate the drug spending without raising the co-payment. Compared with the traditional co-payment, the drug rebate discourages patients from further expenses due to the limited cash flow. Thus a cost-saving incentive, in the form of a deterrent, is induced for the patients.