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Does demand for health services depend on cost-sharing? Evidence from Italy

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  • Ponzo, Michela
  • Scoppa, Vincenzo

Abstract

Many health systems adopt cost-sharing plans – requiring individuals to pay a part of the costs of medical services – to tackle the problem of overconsumption. It is not clear how effective cost-sharing is since the empirical evidence is mainly based on the US system, quite different from the European systems. Using an Italian dataset of about 87000 individuals for 2013, we investigate to what extent the exemption from cost-sharing affects the demand for health services. Estimating a model with Instrumental Variables, we exploit the threshold of age 65 giving complete exemption from cost-sharing, comparing the demand for health services by individuals below and above age 65. We find that individuals with exemption significantly increase their demand for specialist visits, diagnostic checks and drug consumption. This is probably due to the attempt of individuals to over-protect against very low health risks, when they bear no cost.

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  • Ponzo, Michela & Scoppa, Vincenzo, 2021. "Does demand for health services depend on cost-sharing? Evidence from Italy," Economic Modelling, Elsevier, vol. 103(C).
    • Handle: RePEc:eee:ecmode:v:103:y:2021:i:c:s0264999321001887
    DOI: 10.1016/j.econmod.2021.105599
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    Cited by:

    1. Purcel, Alexandra-Anca & Dragos, Cristian Mihai & Mare, Codruța & Dragos, Simona Laura, 2023. "Voluntary health insurance and out-of-pocket payments in European OECD countries," Economic Modelling, Elsevier, vol. 120(C).
    2. Brenna, Elenka & Polistena, Barbara & Spandonaro, Federico, 2023. "Analysing outpatient care access for planning purposes: The Basilicata Region experience," Evaluation and Program Planning, Elsevier, vol. 99(C).
    3. Vanessa Cirulli & Giuliano Resce & Marco Ventura, 2021. "Co-payment exemption and healthcare consumption. Quasi-experimental evidence from Italy," Working Papers in Public Economics 203, University of Rome La Sapienza, Department of Economics and Law.

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    More about this item

    Keywords

    Health insurance; Healthcare demand; Cost-sharing; Moral hazard; Health outcomes; Health expenditure; Instrumental variables;
    All these keywords.

    JEL classification:

    • I10 - Health, Education, and Welfare - - Health - - - General
    • I13 - Health, Education, and Welfare - - Health - - - Health Insurance, Public and Private
    • I11 - Health, Education, and Welfare - - Health - - - Analysis of Health Care Markets
    • I18 - Health, Education, and Welfare - - Health - - - Government Policy; Regulation; Public Health
    • H51 - Public Economics - - National Government Expenditures and Related Policies - - - Government Expenditures and Health
    • C26 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Instrumental Variables (IV) Estimation

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