iraomonai nealtn nisurance relmourses as a runcuon or expenditure or use. Because insurance drives the marginal price of medical care at the point of use to near zero, so the usual View goes, consumersor physicians acting as their agentsdemand care until the marginal product of additional care is nearly zero. To use Alain Enthoven's (1980) phrase, we engage in "at-of-the curve" medicine, where spending on medical care increases even though the additional gains from such spending are very low or nonexistentl Moreover, the argument continues, the exclusion of employer-paid premiums from tax- able income exacerbates this situation by leading to excessive health insurance (Feldstein and Allison, 1974). Pauly (1986) offers a review of this literature; a 1This View is buttressed by studies showing a reasonably high percentage of proceduresa sixth to