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Patient Cost-Sharing and Healthcare Utilization in Early Childhood: Evidence from a Regression Discontinuity Design

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  • Hsing-Wen Han
  • Hsien-Ming Lien
  • Tzu-Ting Yang

Abstract

This paper estimates the price elasticity of healthcare utilization in early childhood. We employ a regression discontinuity design by exploiting a subsidy that reduces patient cost-sharing for children under age 3 in Taiwan. Using longitudinal medical claims of over 410,000 children, we find a modest price elasticity of outpatient expenditure (e.g., −0.10 for regular outpatient care). Furthermore, increased cost-sharing at age 3 largely decreases the chance of visiting high-intensity healthcare providers (e.g., teaching hospitals) for minor illnesses. In contrast, children's utilization of inpatient care is price insensitive, providing a rationale for full inpatient care coverage to children.

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  • 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.
  • Handle: RePEc:aea:aejpol:v:12:y:2020:i:3:p:238-78
    DOI: 10.1257/pol.20170009
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    1. Chris Sampson’s journal round-up for 24th August 2020
      by Chris Sampson in The Academic Health Economists' Blog on 2020-08-24 11:00:07

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    More about this item

    JEL classification:

    • H51 - Public Economics - - National Government Expenditures and Related Policies - - - Government Expenditures and Health
    • I11 - Health, Education, and Welfare - - Health - - - Analysis of Health Care Markets
    • I12 - Health, Education, and Welfare - - Health - - - Health Behavior
    • 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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