Impact of Time of Diagnosis on Out-of-Pocket Costs of Cancer Treatment, a Side Effect of Health Insurance Design in Australia

13 Pages Posted: 26 Mar 2024

See all articles by Maryam Naghsh Nejad

Maryam Naghsh Nejad

IZA Institute of Labor Economics; University of Technology Sydney (UTS)

Kees Van Gool

The University of Sydney

Abstract

The Extended Medicare Safety Net (EMSN) in Australia was designed to provide financial assistance to patients with high out-of-pocket (OOP) costs for medical treatment. The EMSN works on a calendar year basis. Once a patient incurs a specified amount of OOP costs, the EMSN provides additional financial benefits for the remainder of the calendar year. Its design is similar to many types of insurance products that have large deductibles and are applied on a calendar year basis. This study examines if the annual quarter within which a patient is diagnosed with cancer has an impact on the OOP costs incurred for treatment. We use administrative linked data from the Sax Institute's 45 and Up Study. Our results indicate that the timing of cancer diagnosis has a significant impact on OOP costs. Specifically, patients diagnosed in the fourth quarter of the calendar year experience significantly higher OOP costs compared to those diagnosed in the first quarter of the year. This pattern persists after controlling for different types of cancer and different stages of cancer and robustness checks. These findings have important implications for the design of the EMSN, as well as other insurance products.

Keywords: out of pocket costs, cancer, public health insurance

JEL Classification: I13, I14, I11

Suggested Citation

Naghsh Nejad, Maryam and Van Gool, Kees, Impact of Time of Diagnosis on Out-of-Pocket Costs of Cancer Treatment, a Side Effect of Health Insurance Design in Australia. IZA Discussion Paper No. 16879, Available at SSRN: https://ssrn.com/abstract=4772566 or http://dx.doi.org/10.2139/ssrn.4772566

Maryam Naghsh Nejad (Contact Author)

IZA Institute of Labor Economics ( email )

P.O. Box 7240
Bonn, D-53072
Germany

University of Technology Sydney (UTS) ( email )

15 Broadway, Ultimo
PO Box 123
Sydney, NSW 2007
Australia

Kees Van Gool

The University of Sydney ( email )

Australia

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