Free for Children? Patient Cost-Sharing and Healthcare Utilization

51 Pages Posted: 3 Dec 2018 Last revised: 25 Aug 2022

See all articles by Toshiaki Iizuka

Toshiaki Iizuka

University of Tokyo

Hitoshi Shigeoka

Simon Fraser University (SFU); National Bureau of Economic Research (NBER); The University of Tokyo - University of Tokyo, Graduate School of Public Policy

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Date Written: November 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.

Suggested Citation

Iizuka, Toshiaki and Shigeoka, Hitoshi, Free for Children? Patient Cost-Sharing and Healthcare Utilization (November 2018). NBER Working Paper No. w25306, Available at SSRN: https://ssrn.com/abstract=3294874

Toshiaki Iizuka (Contact Author)

University of Tokyo ( email )

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Japan

Hitoshi Shigeoka

Simon Fraser University (SFU) ( email )

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Canada
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The University of Tokyo - University of Tokyo, Graduate School of Public Policy ( email )

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