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The Impact of An Increase in User Costs on the Demand For Emergency Services: The Case of Portuguese Hospitals

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  • Pedro Ramos

    ()
    (Faculdade de Economia, Universidade do Porto)

  • Álvaro Almeida

    ()
    (CEF.UP and Faculdade de Economia, Universidade do Porto)

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    Abstract

    Evidence on the impact of user costs on healthcare demand in “universal” public National Health Service (NHS) systems is scarce. The changes in copayments and in the regulation of the provision of free patient transportation, introduced in early 2012 in Portugal, provide a natural experiment to evaluate that impact. However, those changes in user costs were accompanied with changes in the criteria that determine which patients are exempt from copayments, implying that changes to the underlying populations made simple comparisons of user rates meaningless. The aim of this paper is to evaluate the impact of increases in direct and indirect user costs on the demand for emergency services (ES), in the context of changes to the underlying populations of exempt and non-exempt patients. Our contributions are twofold: we develop a new methodology for analyzing ES demand changes following user cost increases when the underlying population is not constant, and we measure the relative impact of copayments and distance costs on ES demand, in NHS-countries, with “almost free” access to healthcare. Our results show that the increase in copayments did not have a significant effect in moderating ES demand by paying users. On the other hand, we find a significant effect of the change in transport regulation in the demand for ES, especially in the more general polyvalent ES and for older patients. Thus, our results support the conclusion that indirect costs may be more important than direct costs in determining healthcare demand in NHS-countries where copayments are small and wide exemption schemes are in place, especially for older patients.

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    Bibliographic Info

    Paper provided by Universidade do Porto, Faculdade de Economia do Porto in its series FEP Working Papers with number 531.

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    Length: 32 pages
    Date of creation: Mar 2014
    Date of revision:
    Handle: RePEc:por:fepwps:531

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    Keywords: Copayments; Indirect costs; healthcare demand;

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    1. Machado, Matilde Pinto & Pita Barros, Pedro Luis & Sanz-de-Galdeano, Anna, 2006. "Moral Hazard and the Demand for Health Services: A Matching Estimator Approach," CEPR Discussion Papers 5488, C.E.P.R. Discussion Papers.
    2. Jaume Puig‐Junoy & Marc Saez & Esther Martínez‐García, 1998. "Why do patients prefer hospital emergency visits? A nested multinomial logit analysis for patient‐initiated contacts," Health Care Management Science, Springer, vol. 1(1), pages 39-52, September.
    3. Chiappori, Pierre-Andre & Durand, Franck & Geoffard, Pierre-Yves, 1998. "Moral hazard and the demand for physician services: First lessons from a French natural experiment," European Economic Review, Elsevier, vol. 42(3-5), pages 499-511, May.
    4. Rainer Winkelmann, 2004. "Co-payments for prescription drugs and the demand for doctor visits - Evidence from a natural experiment," Health Economics, John Wiley & Sons, Ltd., vol. 13(11), pages 1081-1089.
    5. �scar D. Lourenço & Pedro L. Ferreira, 2005. "Utilization of public health centres in Portugal: effect of time costs and other determinants. Finite mixture models applied to truncated samples," Health Economics, John Wiley & Sons, Ltd., vol. 14(9), pages 939-953.
    6. Acton, Jan Paul, 1975. "Nonmonetary Factors in the Demand for Medical Services: Some Empirical Evidence," Journal of Political Economy, University of Chicago Press, vol. 83(3), pages 595-614, June.
    7. Manning, Willard G. & Marquis, M. Susan, 1996. "Health insurance: The tradeoff between risk pooling and moral hazard," Journal of Health Economics, Elsevier, vol. 15(5), pages 609-639, October.
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