Abstract

The paper focus on secondary prevention (diagnostic screening, medical examination, chech-up…) which refers to the early detection of disese. In particular secondary prevention in analyzed as an instrument of self-isurance: if illness occurs, the negative health shock decrease. Both the case in which secondary prevention and treatment are complementary goods, and that in which they are substitutes, are analyzed. Optimal reimbursement for prevention and treatment is derived when insurance uses a liner mechanism. Results show that, starting from a situation with no insurance, a linear contract always encourages treatment consumption whereas it may either encourage or discourage secondary prevention consumption. Prebention consumption is discouraged when the two goods are substitutes. In the former case, one of the two goods is taxed and the other is subsidized, while in the latter case the two goods are either both subsidized or taxed.