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Are prescription drug insurance choices consistent with expected utility theory?

Publication ,  Journal Article
Bundorf, MK; Mata, R; Schoenbaum, M; Bhattacharya, J
Published in: Health psychology : official journal of the Division of Health Psychology, American Psychological Association
September 2013

To determine the extent to which people make choices inconsistent with expected utility theory when choosing among prescription drug insurance plans and whether tabular or graphical presentation format influences the consistency of their choices.Members of an Internet-enabled panel chose between two Medicare prescription drug plans. The "low variance" plan required higher out-of-pocket payments for the drugs respondents usually took but lower out-of-pocket payments for the drugs they might need if they developed a new health condition than the "high variance" plan. The probability of a change in health varied within subjects and the presentation format (text vs. graphical) and the affective salience of the clinical condition (abstract vs. risk related to specific clinical condition) varied between subjects. Respondents were classified based on whether they consistently chose either the low or high variance plan. Logistic regression models were estimated to examine the relationship between decision outcomes and task characteristics.The majority of respondents consistently chose either the low or high variance plan, consistent with expected utility theory. Half of respondents consistently chose the low variance plan. Respondents were less likely to make discrepant choices when information was presented in graphical format.Many people, although not all, make choices consistent with expected utility theory when they have information on differences among plans in the variance of out-of-pocket spending. Medicare beneficiaries would benefit from information on the extent to which prescription drug plans provide risk protection.

Duke Scholars

Published In

Health psychology : official journal of the Division of Health Psychology, American Psychological Association

DOI

EISSN

1930-7810

ISSN

0278-6133

Publication Date

September 2013

Volume

32

Issue

9

Start / End Page

986 / 994

Related Subject Headings

  • United States
  • Public Health
  • Psychological Theory
  • Prescription Drugs
  • Medicare
  • Male
  • Insurance, Pharmaceutical Services
  • Humans
  • Financing, Personal
  • Female
 

Citation

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ICMJE
MLA
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Bundorf, M. K., Mata, R., Schoenbaum, M., & Bhattacharya, J. (2013). Are prescription drug insurance choices consistent with expected utility theory? Health Psychology : Official Journal of the Division of Health Psychology, American Psychological Association, 32(9), 986–994. https://doi.org/10.1037/a0033517
Bundorf, M Kate, Rui Mata, Michael Schoenbaum, and Jay Bhattacharya. “Are prescription drug insurance choices consistent with expected utility theory?Health Psychology : Official Journal of the Division of Health Psychology, American Psychological Association 32, no. 9 (September 2013): 986–94. https://doi.org/10.1037/a0033517.
Bundorf MK, Mata R, Schoenbaum M, Bhattacharya J. Are prescription drug insurance choices consistent with expected utility theory? Health psychology : official journal of the Division of Health Psychology, American Psychological Association. 2013 Sep;32(9):986–94.
Bundorf, M. Kate, et al. “Are prescription drug insurance choices consistent with expected utility theory?Health Psychology : Official Journal of the Division of Health Psychology, American Psychological Association, vol. 32, no. 9, Sept. 2013, pp. 986–94. Epmc, doi:10.1037/a0033517.
Bundorf MK, Mata R, Schoenbaum M, Bhattacharya J. Are prescription drug insurance choices consistent with expected utility theory? Health psychology : official journal of the Division of Health Psychology, American Psychological Association. 2013 Sep;32(9):986–994.

Published In

Health psychology : official journal of the Division of Health Psychology, American Psychological Association

DOI

EISSN

1930-7810

ISSN

0278-6133

Publication Date

September 2013

Volume

32

Issue

9

Start / End Page

986 / 994

Related Subject Headings

  • United States
  • Public Health
  • Psychological Theory
  • Prescription Drugs
  • Medicare
  • Male
  • Insurance, Pharmaceutical Services
  • Humans
  • Financing, Personal
  • Female