1.0Glossaryhttps://www.healthbenefitstimes.com/glossaryGlossaryhttps://www.healthbenefitstimes.com/glossary/author/adminglossary/Moral hazard - Definition of Moral hazardrich600338<blockquote class="wp-embedded-content" data-secret="CSi20f7BM3"><a href="https://www.healthbenefitstimes.com/glossary/moral-hazard/">Moral hazard</a></blockquote><iframe sandbox="allow-scripts" security="restricted" src="https://www.healthbenefitstimes.com/glossary/moral-hazard/embed/#?secret=CSi20f7BM3" width="600" height="338" title="“Moral hazard” — Glossary" data-secret="CSi20f7BM3" frameborder="0" marginwidth="0" marginheight="0" scrolling="no" class="wp-embedded-content"></iframe><script>
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A term deriving from the fire insurance industry describing the phenomenon that insured buildings are more likely to burn than uninsured ones. This has significance for the health care industry since the same phenomenon applies to utilization of health care benefits - patients are more likely to use a service if they pay for it with "somebody else's money (SEM)." Any delivery system with a high moral hazard component is likely to cost more because there is no incentive built into the system to encourage the reduction of costs.