Patient Cost Sharing and Medical Expenditures for the Elderly

40 Pages Posted: 21 Oct 2015

See all articles by Kazuya Fukushima

Kazuya Fukushima

University of Tokyo - Graduate School of Public Policy

Sou Mizuoka

University of Tokyo

Shunsuke Yamamoto

University of Tokyo

Toshiaki Iizuka

University of Tokyo

Date Written: October 10, 2015

Abstract

Despite the rapidly aging population, relatively little is known about how cost sharing affects the elderly’s medical spending. Exploiting longitudinal claims data and the drastic reduction of coinsurance from 30% to 10% at age 70 in Japan, we find that the elderly’s demand responses are heterogeneous in ways that have not been previously reported. Outpatient services by orthopedic and eye specialties, which will continue to increase in an aging society, are particularly price responsive and account for a large share of the spending increase. Lower cost sharing increases demand for brand-name drugs but not for generics. These high price elasticities may call for different cost-sharing rules for these services. Patient health status also matters: receiving medical services appears more discretionary for the healthy than the sick in the outpatient setting. Finally, we found no evidence that additional medical spending improved short-term health outcomes.

Keywords: Medical spending, cost sharing, price elasticity, elderly population

JEL Classification: I11, I13, I18

Suggested Citation

Fukushima, Kazuya and Mizuoka, Sou and Yamamoto, Shunsuke and Iizuka, Toshiaki, Patient Cost Sharing and Medical Expenditures for the Elderly (October 10, 2015). Journal of Health Economics, Forthcoming, Available at SSRN: https://ssrn.com/abstract=2677068

Kazuya Fukushima

University of Tokyo - Graduate School of Public Policy ( email )

Yayoi 1-1-1
Bunkyo-ku
Tokyo, 113-8657
Japan

Sou Mizuoka

University of Tokyo ( email )

Yayoi 1-1-1
Bunkyo-ku
Tokyo, Tokyo 113-8657
Japan

Shunsuke Yamamoto

University of Tokyo ( email )

Yayoi 1-1-1
Bunkyo-ku
Tokyo, Tokyo 113-8657
Japan

Toshiaki Iizuka (Contact Author)

University of Tokyo ( email )

7-3-1 Hongo, Bunkyo-ku
Tokyo 113-0033
Japan

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