Medical Assistance System and Inpatient Health Care Utilization: Empirical Evidence from Short-term Hospitalization in Japan
52 Pages Posted: 25 Dec 2013 Last revised: 11 Mar 2016
Date Written: March 10, 2016
I use two nationally representative sets of medical claim data from the Ministry of Health, Labour, and Welfare in Japan to examine how medical assistance system assignment affects beneficiary utilization of short-term inpatient health care. Since assignment of public assistance by local government is not random but is subject to means testing, I estimate instrumental variable models to control for this endogeneity. I find that monthly medical expenditure is significantly higher for medical assistance patients than that for universal public health insurance patients, but its implied price elasticity ranges from -0.158 to -0.081, which is equivalent to or slightly lower than the elasticity for the RAND health insurance experiment and for the recent Japanese studies. If the effect of patients with high medical expenditure is excluded, the price elasticity becomes more inelastic. However, there is no significant difference in length of hospital stay between medical assistance and health insurance patients. These findings imply that the medical assistance patients are provided with more intensive inpatient treatments than health insurance patients during short-term hospitalization.
Keywords: Medical assistance system; Inpatient health care utilization; Price elasticity; Japan
JEL Classification: I13, I18, I38
Suggested Citation: Suggested Citation