Free for Children? Patient Cost-Sharing and Healthcare Utilization

50 Pages Posted: 13 Dec 2018

See all articles by Toshiaki Iizuka

Toshiaki Iizuka

University of Tokyo

Hitoshi Shigeoka

Simon Fraser University (SFU); National Bureau of Economic Research (NBER)

Multiple version iconThere are 2 versions of this paper

Date Written: November 28, 2018

Abstract

This study exploits over 5,000 variations in subsidy generosity across ages and municipalities in Japan to examine how children respond to healthcare prices. We find that free care significantly increases outpatient spending, with price elasticities considerably smaller than for adults. Price responses are substantially larger when small copayments are introduced, indicating more elastic demand around a zero price. We also find that increased utilization primarily reflects low-value and costly care: increased outpatient spending neither reduces subsequent hospitalization by “avoidable” conditions nor improves short- or medium-term health outcomes. By contrast, inappropriate use of antibiotics and costly after-hours visits increase.

Keywords: Children, Patient Cost-Sharing, Healthcare Utilization, Price Elasticity, Moral Hazard

JEL Classification: I18, I13, I11, J13

Suggested Citation

Iizuka, Toshiaki and Shigeoka, Hitoshi, Free for Children? Patient Cost-Sharing and Healthcare Utilization (November 28, 2018). Available at SSRN: https://ssrn.com/abstract=3287571 or http://dx.doi.org/10.2139/ssrn.3287571

Toshiaki Iizuka

University of Tokyo ( email )

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

Hitoshi Shigeoka (Contact Author)

Simon Fraser University (SFU) ( email )

8888 University Drive
Burnaby, British Columbia V5A 1S6
Canada
(778)782-5348 (Phone)
(778)782-5348 (Fax)

HOME PAGE: http://sites.google.com/site/hshigeoka/

National Bureau of Economic Research (NBER) ( email )

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

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