John Nyman, '70
The Theory of Demand for Health Insurance. Hardcover, 244 pages; Stanford University Press, November 2002; ISBN: 0-8047-4882-9.
Nyman is professor of health services research and policy at the University of Minnesota.
In brief, his new theory of consumer demand for health insurance says that people purchase insurance to obtain additional income when they become ill. In effect, insurance companies act to transfer insurance premiums from those who remain healthy to those who become ill. The additional income generates purchases of additional high-value care, often allowing sick persons to obtain life-saving care that they could not otherwise afford. Consumers, Nyman says, purchase insurance not to avoid risk but to pay a premium when healthy in exchange for a claim on additional income in the form of medical care if they become ill.
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