Suboptimal provision of preventive healthcare due to expected enrollee turnover among private insurers.

Academic Article


  • Many preventive healthcare procedures are widely recognized as cost-effective but have relatively low utilization rates in the US. Because preventive care is a present-period investment with a future-period expected financial return, enrollee turnover among private insurers lowers the expected return of this investment. In this paper, I present a simple theoretical model to illustrate the suboptimal provision of preventive healthcare that results from insurers 'free riding' off of the provision from others. I also provide an empirical test of this hypothesis using data from the Community Tracking Study's Household Survey. I use lagged market-level measures of employment-induced insurer turnover to identify variation in insurers' expectations and test for the effect of turnover on several different measures of medical utilization. As expected, I find that turnover has a significantly negative effect on the utilization of preventive services and has no effect on the utilization of acute services used as a control.
  • Status

    Publication Date

  • April 2010
  • Published In

  • Health Economics  Journal
  • Keywords

  • Adult
  • Cost-Benefit Analysis
  • Female
  • Health Care Surveys
  • Humans
  • Insurance, Health
  • Male
  • Middle Aged
  • Models, Theoretical
  • Preventive Health Services
  • Private Sector
  • United States
  • Young Adult
  • Digital Object Identifier (doi)

    Pubmed Id

  • 19353530
  • Start Page

  • 438
  • End Page

  • 448
  • Volume

  • 19
  • Issue

  • 4