Economic Analysis of Risk and Uncertainty Induced by Health Shocks: A Review and Extension
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innovation is the primary method by which the real price of health is reduced over time,
it can be viewed as serving the role of insuring future health. For example, the lower
price of health enabled by innovation in treatments for breast cancer and HIV has
smoothed health across such future disease states. Medical innovation is to health what
health-care insurance is to health care; a certain payment for medical R&D lowers the
price of future health while a certain health insurance premium lowers the price of
future health care. Thus, medical R&D is ...
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