TAILIEUCHUNG - Kifmann and Scheuer Health Economics Review 2011, 1:14

Kifmann and Scheuer Health Economics Review 2011, 1:14 RESEARCH Open Access Balance billing: the patients’ perspective Mathias Kifmann1* and Florian Scheuer2 Abstract We study the effects of ‘balance billing’, ., allowing physicians to charge a fee from patients in addition to the fee paid by Medicare. First, we show that on pure efficiency grounds the optimal Medicare fee under balance billing is zero. An active Medicare policy thus can only be justified when distributional concerns are accounted for. Extending the analysis by Glazer and McGuire, we therefore analyze the optimal policy from the patients’ point of view. We demonstrate that, from the patients’ perspective,. | Kifmann and Scheuer Health Economics Review 2011 1 14 http content 1 1 14 o Health Economics Review a SpringerOpen Journal RESEARCH Open Access Balance billing the patients perspective Mathias Kifmann1 and Florian Scheuer2 Abstract We study the effects of balance billing . allowing physicians to charge a fee from patients in addition to the fee paid by Medicare. First we show that on pure efficiency grounds the optimal Medicare fee under balance billing is zero. An active Medicare policy thus can only be justified when distributional concerns are accounted for. Extending the analysis by Glazer and McGuire we therefore analyze the optimal policy from the patients point of view. We demonstrate that from the patients perspective a positive fee can be superior under balance billing. Furthermore patient welfare can be lower if balance billing is prohibited. In particular this is the case if the administrative costs of Medicare are large. However we cannot rule out that prohibiting balance billing may be superior. Finally we show that payer fee discrimination increases patient welfare if Medicare s administrative costs are high or if Medicare s optimal fee under balance billing implies lower quality for fee-only patients. JEL-classification I11 I18 H51 Keywords physician reimbursement price controls Medicare 1 Introduction The US Medicare program allows doctors to balance bill patients . to charge them a price in addition to the Medicare payment. In the late 80s and early 90s state and federal legislation was introduced to restrict this practice. Additional prices are now limited to about 10 of the Medicare fee. endnote a In a theoretical study Glazer and McGuire have shown that these restrictions on balance billing come at a price as doctors have an incentive to reduce the quality of their services 1 . Strikingly prohibiting balance billing reduces quality for all patients regardless of whether they pay a balance bill. From an .

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