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KMID : 1170320030090020035
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Korean Journal of Health Economics and Policy
2003 Volume.9 No. 2 p.35 ~ p.51
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The Effect of Consumer Health Information on Demand for Medical Care
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Lim Jae-Young
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Abstract
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The pervasiveness of the uncertainty in the field of medical care has long been recognized. According to Arrow (1963) there are two kinds of uncertainty in this field. The first one is the uncertainty of the patient’s basic, pre-treatment or ex ante level of health and the second source is the uncertainty surrounding the effectiveness of the medical care. Due to this property, it has been recognized that the efficiency of patient’s use of medical care can’t be guaranteed. Therefore if the consumer could be the better informed one through obtaining more and better information from various sources, we
should expect the unnecessary demand to be reduced in a way of enhancing the efficiency of use of medical care.
Based on the notion above, health information is valuable to the consumer because it allows him to make better decisions about purchasing medical care. In other words, the health information deserves to obtain in the sense of reducing the uncertainties of the consumption of medical care.
This paper theoretically investigates the effect of health information on consumer’s demand for medical care. Concerning the uncertainty of the patient’s ex ante level of health, this paper suggests the health information decreases patient’s demand for medical care, which means as individual has greater confidence in his self-diagnosis on his health state with
more health information, his demand for medicalcare might fall. However, regarding the uncertainty of the effectiveness of medical care, even if the consumer has better information on it, we can’t necessarily say about the direction of the change of consumer’s demand for medical care.
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KEYWORD
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Consumer health information, uncertainties in health field, the Rothschild-Stiglitz increase in risk, demand for medical care
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