Patient Cost Sharing and Healthcare Utilization in Early Childhood: Evidence from a Regression Discontinuity Design
101 Pages Posted: 13 Oct 2016 Last revised: 19 Feb 2019
Date Written: February 16, 2019
Abstract
This paper estimates the price elasticity of healthcare utilization in early childhood. We employ regression discontinuity design by exploiting a subsidy that reduces patient cost-sharing for children aged under 3 in Taiwan. Using longitudinal medical claims of over 410,000 children, we find a modest price elasticity of outpatient expenditure (e.g. -0.12 for regular outpatient care). Furthermore, cost-sharing subsidy largely increases the chance of visiting expensive healthcare providers (e.g. teaching hospitals) for minor illnesses. In contrast, children’s utilization of inpatient care is price insensitive. Finally, we find no evidence that subsidy-induced healthcare utilization improves children’s health outcome.
Keywords: Patient cost sharing, Early childhood
JEL Classification: I13
Suggested Citation: Suggested Citation