Free for Children? Patient Cost-Sharing and Healthcare Utilization
50 Pages Posted: 13 Dec 2018
Date Written: November 28, 2018
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: Suggested Citation