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New estimates of the demand for physical and mental health treatment

Author

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  • Chad D. Meyerhoefer

    (Department of Economics, Lehigh University, Bethlehem, PA, USA)

  • Samuel H. Zuvekas

    (Center for Financing, Access and Cost Trends, Agency for Healthcare Research and Quality, Rockville, MD, USA)

Abstract

Consumers' price responsiveness is central to US health-care reform proposals, but the best available estimates are now more than 25 years old. We estimate health-care demands by calculating expected end-of-year prices and incorporating them into a zero-inflated ordered probit model applied to several overlapping panels of data from 1996 to 2003. Results from our correlated random effects specification indicate that the price responsiveness of ambulatory mental health treatment has decreased substantially and is now slightly lower than physical health treatment. This suggests that concerns over moral hazard alone do not warrant less generous coverage for mental health. However, prescription drug demand is more price elastic. Published in 2009 by John Wiley & Sons, Ltd.

Suggested Citation

  • Chad D. Meyerhoefer & Samuel H. Zuvekas, 2010. "New estimates of the demand for physical and mental health treatment," Health Economics, John Wiley & Sons, Ltd., vol. 19(3), pages 297-315.
  • Handle: RePEc:wly:hlthec:v:19:y:2010:i:3:p:297-315
    DOI: 10.1002/hec.1476
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    File URL: http://hdl.handle.net/10.1002/hec.1476
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    References listed on IDEAS

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    Cited by:

    1. Helmut Farbmacher & Peter Ihle & Ingrid Schubert & Joachim Winter & Amelie Wuppermann, 2017. "Heterogeneous Effects of a Nonlinear Price Schedule for Outpatient Care," Health Economics, John Wiley & Sons, Ltd., vol. 26(10), pages 1234-1248, October.
    2. Lizhong Peng & Chad D. Meyerhoefer & Samuel H. Zuvekas, 2016. "The Short‐Term Effect of Depressive Symptoms on Labor Market Outcomes," Health Economics, John Wiley & Sons, Ltd., vol. 25(10), pages 1223-1238, October.

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