Genetic testing with primary prevention and moral hazard

We develop a model where a genetic test reveals whether an individual has a low or high probability of developing a disease. A costly prevention effort allows high-risk agents to decrease this probability. Agents are not obliged to take the test, but must disclose its results to insurers, and taking the test is associated to a discrimination risk. We study the individual decisions to take the test and to undertake the prevention effort as a function of the effort cost and of its efficiency. If effort is observable by insurers, agents undertake the test only if the effort cost is neither too large nor too low. If the effort cost is not observable by insurers, moral hazard increases the value of the test if the effort cost is low. We offer several policy recommendations, from the optimal breadth of the tests to policies to do away with the discrimination risk

MORAL HAZARD IN DYNAMIC INSURANCE CLASSIFICATION RISK AND PREPAYMENT

This paper examines the effect of moral hazard on dynamic insurance contract. It models primary prevention in a two period model with classification risk. Agents' preferences appear to play an important role in the determination of preventive effort and prepayment. If absolute prudence is larger that absolute risk aversion, moral hazard increases prepayment of premium and classification risk. This highlights a tradeoff between prevention and prepayment that arises from the classification risk. An increase in the difference between prudence and twice risk aversion (that we define as the degree of foresight) moreover makes dynamic insurance contracts more stable (when competing with spot insurance) if the cost of prevention is low enough when agents preferences exhibit CRRA. Under a formulated utility function with linear reciprocal derivative, we finally show that an increase in agents' degree of foresight enhances the stability of dynamic contract and the extent of prepayment.Le présent article a pour but d'étudier l'effet de l'aléa moral sur les contrats d'assurance dynamique. Des efforts de prévention primaire sont introduits dans un modèle à deux périodes avec risque de classification. Ce travail met en évidence le rôle de la prudence et de l'aversion au risque dans la détermination des efforts de prévention primaire et du degré de prépaiement. Si le coefficient absolu de prudence est supérieur à deux fois le coefficient absolu d'aversion au risque, la prise en compte de l'aléa moral augmente le prépaiement et le risque de classification. Ce résultat met en évidence l'arbitrage fait par les agents face au risque de classification, entre effort de prévention et prépaiement des primes. Dans le cas d'agents aux préférences CRRA il apparait par ailleurs qu'un accord d'assurance mutuelle est d'autant plus stable par rapport au phénomène d'écrémage qu'il concerne des agents prévoyants (i.e. dont l'écart entre prudence et deux fois l'aversion au risque est élevé). Enfin, en spécifiant une fonction d'utilité dont la réciproque à une dérivée linéaire, il apparaît qu'une augmentation du degré de prévoyance des agents, accroît le degré de prépaiement et améliore la stabilité du contrat dynamique

Impact of previous hepatitis B infection on the clinical outcomes from chronic hepatitis C? A population-level analysis

Chronic coinfection with hepatitis C virus (HCV) and hepatitis B virus (HBV) is associated with adverse liver outcomes. The clinical impact of previous HBV infection on liver disease in HCV infection is unknown. We aimed at determining any association of previous HBV infection with liver outcomes using antibodies to the hepatitis B core antigen (HBcAb) positivity as a marker of exposure. The Scottish Hepatitis C Clinical Database containing data for all patients attending HCV clinics in participating health boards was linked to the HBV diagnostic registry and mortality data from Information Services Division, Scotland. Survival analyses with competing risks were constructed for time from the first appointment to decompensated cirrhosis, hepatocellular carcinoma (HCC) and liver‐related mortality. Records of 8513 chronic HCV patients were included in the analyses (87 HBcAb positive and HBV surface antigen [HBsAg] positive, 1577 HBcAb positive and HBsAg negative, and 6849 HBcAb negative). Multivariate cause‐specific proportional hazards models showed previous HBV infection (HBcAb positive and HBsAg negative) significantly increased the risks of decompensated cirrhosis (hazard ratio [HR]: 1.29, 95% CI: 1.01‐1.65) and HCC (HR: 1.64, 95% CI: 1.09‐2.49), but not liver‐related death (HR: 1.02, 95% CI: 0.80‐1.30). This is the largest study to date showing an association between previous HBV infection and certain adverse liver outcomes in HCV infection. Our analyses add significantly to evidence which suggests that HBV infection adversely affects liver health despite apparent clearance. This has important implications for HBV vaccination policy and indications for prioritization of HCV therapy

Virological outcomes of second-line protease inhibitor-based treatment for human immunodeficiency virus type 1 in a high-prevalence rural South African setting: a competing-risks prospective cohort analysis

Background. Second-line antiretroviral therapy (ART) based on ritonavir-boosted protease inhibitors (bPIs) represents the only available option after first-line failure for the majority of individuals living with human immunodeficiency virus (HIV) worldwide. Maximizing their effectiveness is imperative. Methods. This cohort study was nested within the French National Agency for AIDS and Viral Hepatitis Research (ANRS) 12249 Treatment as Prevention (TasP) cluster-randomized trial in rural KwaZulu-Natal, South Africa. We prospectively investigated risk factors for virological failure (VF) of bPI-based ART in the combined study arms. VF was defined by a plasma viral load >1000 copies/mL ≥6 months after initiating bPI-based ART. Cumulative incidence of VF was estimated and competing risk regression was used to derive the subdistribution hazard ratio (SHR) of the associations between VF and patient clinical and demographic factors, taking into account death and loss to follow-up. Results. One hundred one participants contributed 178.7 person-years of follow-up. Sixty-five percent were female; the median age was 37.4 years. Second-line ART regimens were based on ritonavir-boosted lopinavir, combined with zidovudine or tenofovir plus lamivudine or emtricitabine. The incidence of VF on second-line ART was 12.9 per 100 person-years (n = 23), and prevalence of VF at censoring was 17.8%. Thirteen of these 23 (56.5%) virologic failures resuppressed after a median of 8.0 months (interquartile range, 2.8-16.8 months) in this setting where viral load monitoring was available. Tuberculosis treatment was associated with VF (SHR, 11.50 [95% confidence interval, 3.92-33.74]; P < .001). Conclusions. Second-line VF was frequent in this setting. Resuppression occurred in more than half of failures, highlighting the value of viral load monitoring of second-line ART. Tuberculosis was associated with VF; therefore, novel approaches to optimize the effectiveness of PI-based ART in high-tuberculosis-burden settings are needed

A Model of Incentive Compatibility under Moral Hazard in Livestock Disease Outbreak Response

This paper uses a principal-agent model to examine incentive compatibility in the presence of information asymmetry between the government and individual producers. Prior models of livestock disease have not incorporated information asymmetry between livestock managers and social planners. By incorporating the asymmetry, we investigate the role of incentives in producer behavior that influences the duration and magnitude of a disease epidemic.livestock disease, moral hazard, principal-agent model, Institutional and Behavioral Economics,

Capturing Scientific Knowledge on Medical Risk Factors

In this paper, we describe a model for representing scientific knowledge of risk factors in medicine in an explicit format which enables its use for automated reasoning. The resulting model supports linking the conclusions of up-to-date clinical research with data relating to individual patients. This model, which we have implemented as an ontology-based system using Linked Data, enables the capture of risk factor knowledge and serves as a translational research tool to apply that knowledge to assist with patient treatment, lifestyle, and education. Knowledge captured using this model can be disseminated for other intelligent systems to use for a variety of purposes, for example, to explore the state of the available medical knowledge

Risk Classification and Health Insurance

Risk classification refers to the use of observable characteristics by insurers to group individuals with similar expected claims, compute the corresponding premiums, and thereby reduce asymmetric information. With perfect risk classification, premiums fully reflect the expected cost associated with each class of risk characteristics and yield efficient outcomes. In the health sector, risk classification is also subject to concerns about social equity and potential discrimination. We present an analytical framework that illustrates the potential trade-off between efficient insurance provision and social equity. We also review empirical studies on risk classification and residual asymmetric information that inform this trade-off

MORAL HAZARD IN DYNAMIC INSURANCE CLASSIFICATION RISK AND PREPAYMENT

This paper examines the effect of moral hazard on dynamic insurance contract. It models primary prevention in a two period model with classification risk. Agents' preferences appear to play an important role in the determination of preventive effort and prepayment. If absolute prudence is larger that absolute risk aversion, moral hazard increases prepayment of premium and classification risk. This highlights a tradeoff between prevention and prepayment that arises from the classification risk. An increase in the difference between prudence and twice risk aversion (that we define as the degree of foresight) moreover makes dynamic insurance contracts more stable (when competing with spot insurance) if the cost of prevention is low enough when agents preferences exhibit CRRA. Under a formulated utility function with linear reciprocal derivative, we finally show that an increase in agents' degree of foresight enhances the stability of dynamic contract and the extent of prepayment.Dynamic Insurance, Classification Risk, Moral Hazard, Prudence

Prevention Incentives in Long-Term Insurance Contracts

Long-term insurance contracts are widespread, particularly in public health and the labor market. Such contracts typically involve monthly or annual premia which are related to the insured’s risk profile, where a given profile might change based on observed outcomes which depend on the insured’s prevention efforts. The aim of this paper is to analyze the latter relationship. In a two-period optimal insurance contract in which the insured’s risk profile is partly governed by the effort he puts on prevention, we find that both the insured’s risk aversion and prudence play a crucial role. If absolute prudence is greater than twice absolute risk aversion, moral hazard justifies setting a higher premium in the first period but also greater premium discrimination in the second period. For specific utility functions, moreover, an increase in the gap between prudence and risk aversion increases the initial premium and the subsequent premium discrimination. These results provide insights on the tradeoffs between long-term insurance and the incentives for primary prevention arising from risk classification, as well as between inter- and intra-generational insurance