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New estimates of the demand for physical and mental health treatment

  • 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)

Registered author(s):

    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.

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    File URL: http://hdl.handle.net/10.1002/hec.1476
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    Article provided by John Wiley & Sons, Ltd. in its journal Health Economics.

    Volume (Year): 19 (2010)
    Issue (Month): 3 ()
    Pages: 297-315

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    Handle: RePEc:wly:hlthec:v:19:y:2010:i:3:p:297-315
    Contact details of provider: Web page: http://www3.interscience.wiley.com/cgi-bin/jhome/5749

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    2. Meyerhoefer Chad D. & Zuvekas Samuel H, 2008. "The Shape of Demand: What Does It Tell Us about Direct-to-Consumer Marketing of Antidepressants?," The B.E. Journal of Economic Analysis & Policy, De Gruyter, vol. 8(2), pages 1-34, January.
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