Search

In health care systems with a competitive health insurance market, governments or other sponsors (e.g. employers) often subsidize premiums to encourage enrolment. These subsidies are typically independent of plan choice leaving the absolute premium differences in place so as not to distort consumer choice of plan. Such subsidies do, however, change the relative premium differences across plans, which, according to theories from behavioral economics, can affect choice. Consumers might be sensitive to differences relative to a reference premium (“relative thinking”). Furthermore, consumers might be particularly sensitive to a reference premium of zero (“zero-price effect”), a relevant range for some subsidized health insurance markets. This paper tests these ideas with two sources of evidence. We argue that observed equilibria in Germany and the U.S. Medicare Advantage markets are consistent with a powerful zero-price effect, resulting in an equilibrium focal pricing at zero. This contrasts with the Netherlands where equilibrium premiums are well above zero. In an empirical test using hypothetical questions in a web-based survey in these three countries, we also find evidence for both a relative thinking and a zero-price effect in the demand for health insurance. Our findings imply that well-designed subsidies can leverage relative thinking to increase demand elasticity for health plans. Creation of a powerful reference price (e.g., at zero), however, risks subverting price competition.

In a number of tissues, a major fraction of the hexokinase isozyme species present is bound at the mitochondrial outer surface. This study addresses the kinetic consequences of binding of hexokinase to the outer membrane of isolated, phosphorylating mitochondria. The primary aim was to separately measure the relative contributions to changes in the kinetic properties of hexokinase which (1) directly result from the binding as such, and (2) are caused by binding in close proximity to the site of mitochondrial ATP regeneration. Hexokinase isozyme I was purified from rat brain and then bound to intact rat liver mitochondria or outer membrane vesicles derived from these mitochondria. The apparent affinity (Km app) for ATP and the Vmax of the bound hexokinase were determined by the spectrophotometric measurement of its activity as a function of the ATP concentration in the medium. The data obtained for the bound enzyme in the two systems were compared to the kinetic characteristics of hexokinase-I present in a non-bound form. Non-bindable hexokinase was obtained by mild protease treatment, such that bindability was completely abolished while the intrinsic catalytic properties remained unaltered. Parallel determinations of the steady-state ATP and ADP levels in mitochondrial suspensions with bound or non-bindable hexokinase present provided additional information on the consequences of binding. Binding of hexokinase to phosphorylating mitochondria decreased the Km app for ATP from 0.168 to 0.081 mM while not changing the Vmax. It appeared that both binding per se (Km app for ATP decreased from 0.168 to 0.105 mM and from 0.194 to 0.103 mM upon binding to non-phosphorylating mitochondria and outer membrane vesicles, respectively) and intramitochondrial ATP regeneration (causing a further reduction in Km app for ATP from 0.105 to 0.081 mM for the system of phosphorylating mitochondria) jointly contributed to this reduction in Km app for ATP caused by binding to phosphorylating mitochondria. The kinetic effect exerted by intramitochondrial ATP regeneration persisted in the presence of an excess of extramitochondrial ATP regenerating activity. ATP and ADP measurements in hexokinase-mitochondria incubations demonstrated that: (i) up to 7 mM ATP in the medium, higher ADP concentrations were maintained for the case of non-bindable enzyme as compared to the bound enzyme; and (ii) ATP levels were not significantly different and therefore not responsible for the kinetic difference between bound and non-bound hexokinase. The present findings are compatible with previous suggestions for local channelling of adenine nucleotides between bound hexokinase and oxidative phosphorylation.