Cost-sharing and the demand for healthcare - Moral hazard

4 important questions on Cost-sharing and the demand for healthcare - Moral hazard

What can be the effect of moral hazard?

It may cause welfare loss

What is welfare loss?

It's inefficient spending of which the marginal benefits are (far) lower than the marginal costs.

Is the equilibrium from P & Q really the best option?

No, people then only get care when they can afford it. This means that there is a group of people who don't have sufficient funds to pay for care they need.
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Does moral hazard differ across different kinds of care?

Yes it can mean that. But most often this had the biggest effect on the GP care. Once someone needs real care they see it as a necessity.

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