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The Effect of Patient Cost Sharing on Utilization, Health, and Risk Protection

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  • Hitoshi Shigeoka

Abstract

This paper exploits a sharp reduction in patient cost sharing at age 70 in Japan, using a regression discontinuity design to examine its effect on utilization, health, and financial risk arising from out-of-pocket expenditures. Due to the national policy, cost sharing is 60–80 percent lower at age 70 than at age 69. I find that both outpatient and inpatient care are price sensitive among the elderly. While I find little impact on mortality and other health outcomes, the results show that reduced cost sharing is associated with lower out-of-pocket expenditures, especially at the right tail of the distribution.

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Bibliographic Info

Article provided by American Economic Association in its journal American Economic Review.

Volume (Year): 104 (2014)
Issue (Month): 7 (July)
Pages: 2152-84

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Handle: RePEc:aea:aecrev:v:104:y:2014:i:7:p:2152-84

Note: DOI: 10.1257/aer.104.7.2152
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  1. Martin Feldstein & Jonathan Gruber, 1994. "A Major Risk Approach to Health Insurance Reform," NBER Working Papers 4852, National Bureau of Economic Research, Inc.
  2. Eric French & John Bailey Jones, 2004. "On the distribution and dynamics of health care costs," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 19(6), pages 705-721.
  3. Wojciech Kopczuk, 2004. "Tax bases, tax rates and the elasticity of reported income," Discussion Papers 0304-15, Columbia University, Department of Economics.
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Cited by:
  1. Silvia H. Barcellos & Mireille Jacobson, 2014. "The Effects of Medicare on Medical Expenditure Risk and Financial Strain," NBER Working Papers 19954, National Bureau of Economic Research, Inc.

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