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

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

Abstract

Healthcare for young children is highly subsidized in many public health insurance programs around the world. However, the existing literature lacks evidence on how the demand for young children's healthcare reacts to these medical subsidy policies. This paper exploits a sharp increase in the required level of patient cost-sharing, the share of healthcare costs the patient must pay out of their own pocket, at age 3 in Taiwan that results from young children "aging out" of the cost-sharing subsidy. This price shock on the 3rd birthday allows us to use a regression discontinuity design to examine the causal effect of cost sharing on the demand for young children's healthcare by comparing the expenditure and utilization of healthcare for young children right before and after the 3rd birthday. Our results show that the increase in the level of patient cost sharing at the 3rd birthday significantly reduces total outpatient expenditure. The implied price elasticity of outpatient expenditure is around -0.10. However, the demand for inpatient care for young children does not respond to a change in cost sharing at the 3rd birthday even though the price variation is much larger. This result implies that the full coverage of inpatient care could improve the welfare of young children.

Suggested Citation

  • Tzu-Ting Yang & Hsing-Wen Han & Hsien-Ming Lien, 2014. "Patient Cost-Sharing and Healthcare Utilization in Early Childhood: Evidence from a Regression Discontinuity Design," Working Papers 14C003, Canadian Centre for Health Economics.
  • Handle: RePEc:cch:wpaper:14c003
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    Cited by:

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    2. Miyawaki, Atsushi & Kobayashi, Yasuki, 2019. "Effect of a medical subsidy on health service utilization among schoolchildren: A community-based natural experiment in Japan," Health Policy, Elsevier, vol. 123(4), pages 353-359.
    3. Natalia Serna, 2021. "Cost sharing and the demand for health services in a regulated market," Health Economics, John Wiley & Sons, Ltd., vol. 30(6), pages 1259-1275, June.
    4. Naimi Johansson & Niklas Jakobsson & Mikael Svensson, 2019. "Effects of primary care cost-sharing among young adults: varying impact across income groups and gender," The European Journal of Health Economics, Springer;Deutsche Gesellschaft für Gesundheitsökonomie (DGGÖ), vol. 20(8), pages 1271-1280, November.
    5. Hirotaka Kato & Rei Goto, 2017. "Effect of reducing cost sharing for outpatient care on children’s inpatient services in Japan," Health Economics Review, Springer, vol. 7(1), pages 1-10, December.
    6. Yizao Liu & Adam N. Rabinowitz, 2021. "The impact of the COVID‐19 pandemic on retail dairy prices," Agribusiness, John Wiley & Sons, Ltd., vol. 37(1), pages 108-121, January.
    7. Nilsson, Anton & Paul, Alexander, 2018. "Patient cost-sharing, socioeconomic status, and children's health care utilization," Journal of Health Economics, Elsevier, vol. 59(C), pages 109-124.

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    More about this item

    Keywords

    patient cost-sharing; health insurance; children health;
    All these keywords.

    JEL classification:

    • G22 - Financial Economics - - Financial Institutions and Services - - - Insurance; Insurance Companies; Actuarial Studies
    • I12 - Health, Education, and Welfare - - Health - - - Health Behavior
    • 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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