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Demand and pricing of preventative healthcare

By Sotiris Vandoros and Katherine Grace Carman

Abstract

This study introduces a theoretical framework for the economics of preventative healthcare. Mathematical models are used to explain how the price and utilization of prevention change depending on demand, as well as factors such as the price of a cure, the probability of illness, the efficacy of treatment, the probability of illness and cost functions. Different models are developed depending on the presence and level of health insurance and competition in preventative healthcare markets. Findings show the effect of various factors on the price of preventative healthcare, reveal the marginal effects of a change in the parameters on prices and suggest that under certain circumstances prevention is not the optimal choice

Topics: H Social Sciences (General), HC Economic History and Conditions, RA Public aspects of medicine
Publisher: LSE Health working papers
Year: 2011
OAI identifier: oai:eprints.lse.ac.uk:37159
Provided by: LSE Research Online

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