"Drug Cost-Control Plans Push Many to Do Without", WSJ October 29, 2002.
Doubling a uniform co-payment from $5 to $10 per prescription lowered per person drug costs from $725 to $563, a 22% drop. But doubling co-payment using a two-tiered system of (cheaper) preferred drugs and non-preferred drugs led to a 33% drop in per person costs. Explain why one would expect this result, that a two-tiered system will reduce spending by more.
[Categories: Insurance, Moral Hazard]
1:35:26 PM 
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