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Free for Children? Patient Cost-sharing and Healthcare Utilization

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  • Toshiaki Iizuka
  • Hitoshi Shigeoka

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

  • Toshiaki Iizuka & Hitoshi Shigeoka, 2018. "Free for Children? Patient Cost-sharing and Healthcare Utilization," NBER Working Papers 25306, National Bureau of Economic Research, Inc.
    • Handle: RePEc:nbr:nberwo:25306
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    Cited by:

    1. Toshiaki Iizuka & Hitoshi Shigeoka, 2020. "Asymmetric Demand Response when Prices Increase and Decrease: The Case of Child Healthcare," NBER Working Papers 28057, National Bureau of Economic Research, Inc.
    2. Shigeoka, Hitoshi & Watanabe, Yasutora, 2023. "Policy Diffusion through Elections," IZA Discussion Papers 16275, Institute of Labor Economics (IZA).
    3. Hsing-Wen Han & Hsien-Ming Lien & Tzu-Ting Yang, 2020. "Patient Cost-Sharing and Healthcare Utilization in Early Childhood: Evidence from a Regression Discontinuity Design," American Economic Journal: Economic Policy, American Economic Association, vol. 12(3), pages 238-278, August.
    4. Jaume Puig‐Junoy & Jaime Pinilla, 2020. "Free prescriptions for low‐income pensioners? The cost of returning to free‐of‐charge drugs in the Spanish National Health Service," Health Economics, John Wiley & Sons, Ltd., vol. 29(12), pages 1804-1812, December.
    5. Cheolmin Kang & Akira Kawamura & Haruko Noguchi, 2019. "Does Free Healthcare Affect Children's Healthcare Use and Outcomes?," Working Papers 1914, Waseda University, Faculty of Political Science and Economics.
    6. Hirotaka Kato & Rei Goto & Taishi Tsuji & Katsunori Kondo, 2022. "The effects of patient cost-sharing on health expenditure and health among older people: Heterogeneity across income groups," The European Journal of Health Economics, Springer;Deutsche Gesellschaft für Gesundheitsökonomie (DGGÖ), vol. 23(5), pages 847-861, July.
    7. Kang, Cheolmin & Kawamura, Akira & Noguchi, Haruko, 2022. "Does free healthcare improve children's healthcare use and outcomes? Evidence from Japan's healthcare subsidy for young children," Journal of Economic Behavior & Organization, Elsevier, vol. 202(C), pages 372-406.
    8. Shen, Menghan & He, Wen & Li, Linyan, 2020. "Incentives to use primary care and their impact on healthcare utilization: Evidence using a public health insurance dataset in China," Social Science & Medicine, Elsevier, vol. 255(C).

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    More about this item

    JEL classification:

    • I11 - Health, Education, and Welfare - - Health - - - Analysis of Health Care Markets
    • I13 - Health, Education, and Welfare - - Health - - - Health Insurance, Public and Private
    • I18 - Health, Education, and Welfare - - Health - - - Government Policy; Regulation; Public Health
    • J13 - Labor and Demographic Economics - - Demographic Economics - - - Fertility; Family Planning; Child Care; Children; Youth

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