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Does Health Insurance Encourage the Rise in Medical Prices? A Test on Balance Billing in France

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  • Brigitte Dormont
  • Mathilde Péron

Abstract

We evaluate the causal impact of an improvement in insurance coverage on patients' decisions to consult physicians who charge more than the regulated fee. We use a French panel data set of 43,111 individuals observed from 2010 to 2012. At the beginning of the period, none of them were covered for balance billing; by the end, 3819 had switched to supplementary insurance contracts that cover balance billing. Using instrumental variables to deal with possible non‐exogeneity of the decision to switch, we find evidence that better coverage increases demand for specialists who charge high fees, thereby contributing to the rise in medical prices. People whose coverage improves increased their average amount of balance billing per consultation by 32%. However, the impact of the coverage shock depends on the supply of physicians. For people residing in areas where few specialists charge the regulated fee, better coverage increases not only prices but also the number of consultations, a finding that suggests that balance billing might limit access to care. Conversely, in areas where patients have a genuine choice between specialists who balance bill and those who do not, we find no evidence of a response to better coverage. Copyright © 2016 John Wiley & Sons, Ltd.

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  • Brigitte Dormont & Mathilde Péron, 2016. "Does Health Insurance Encourage the Rise in Medical Prices? A Test on Balance Billing in France," Health Economics, John Wiley & Sons, Ltd., vol. 25(9), pages 1073-1089, September.
  • Handle: RePEc:wly:hlthec:v:25:y:2016:i:9:p:1073-1089
    DOI: 10.1002/hec.3347
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    References listed on IDEAS

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    As found by EconAcademics.org, the blog aggregator for Economics research:
    1. Thesis Thursday: Mathilde Péron
      by Chris Sampson in The Academic Health Economists' Blog on 2017-10-19 11:00:45

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    1. Clémence Bussière & Nicolas Sirven & Thomas Rapp & Christine Sevilla‐Dedieu, 2020. "Adherence to medical follow‐up recommendations reduces hospital admissions: Evidence from diabetic patients in France," Health Economics, John Wiley & Sons, Ltd., vol. 29(4), pages 508-522, April.
    2. Péron, M.; & Dormont, B.;, 2018. "Heterogeneous moral hazard in Supplementary Health Insurance," Health, Econometrics and Data Group (HEDG) Working Papers 18/27, HEDG, c/o Department of Economics, University of York.
    3. Benjamin Montmartin & Mathieu Escot, 2017. "Local Competition and Physicians’ Pricing Decisions: New Evidence from France," GREDEG Working Papers 2017-31, Groupe de REcherche en Droit, Economie, Gestion (GREDEG CNRS), Université Côte d'Azur, France.
    4. Damien Besancenot & Karine Lamiraud & Radu Vranceanu, 2020. "A Model for Dual Healthcare Market with Congestion Differentiation," Working Papers hal-03028437, HAL.

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