Assessing the Effectiveness of Health Care Cost Containment Measures

Abstract:     
Using SOEP panel data and difference-in-differences methods, this study is the first to empirically evaluate the effectiveness of four different health care cost containment measures within an integrated framework. The four measures investigated were introduced in Germany in 1997 to reduce moral hazard and public health expenditures in the market for convalescent care. Doubling the daily co-payments was clearly the most effective cost containment measure, resulting in a reduction in demand of about 20 percent. Indirect measures such as allowing employers to cut statutory sick pay or paid vacation during health spa stays did not significantly reduce demand.

Number of Pages in PDF File: 36

Keywords: Health Expenditures, Cost Containment Measures, Copayment, Convalescent Care, SOEP

JEL Classification: H51, I11, I18, J22

working papers series