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Free for Children? Patient Cost-sharing and Healthcare Utilization

Author

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  • Iizuka, Toshiaki
  • Shigeoka, Hitoshi

Abstract

We examine how children's healthcare utilization responds to prices by exploiting over 10,000 variations in the levels and forms of patient cost-sharing across Japanese municipalities over time. Free care significantly increases outpatient spending, with price elasticities considerably smaller for children than adults. Small copayments alongside free care reduce utilization of healthier—rather than sicker—children, suggesting that moral hazard can be reduced without increasing financial and health risks. We find that cost-sharing is a "blunt tool," affecting utilization regardless of service type. Increased outpatient spending from free care neither improves short- and medium-term health outcomes nor reduces future healthcare spending

Suggested Citation

  • Iizuka, Toshiaki & Shigeoka, Hitoshi, 2019. "Free for Children? Patient Cost-sharing and Healthcare Utilization," CEI Working Paper Series 2019-5, Center for Economic Institutions, Institute of Economic Research, Hitotsubashi University.
    • Handle: RePEc:hit:hitcei:2019-5
    Note: This version: August 6, 2019
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    File URL: https://hit-u.repo.nii.ac.jp/record/2055791/files/wp2019-5.pdf
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    2. Toshiaki Iizuka & Hitoshi Shigeoka, 2023. "Asymmetric Demand Response When Prices Increase and Decrease: The Case of Child Health Care," The Review of Economics and Statistics, MIT Press, vol. 105(5), pages 1325-1333, September.
    3. Shigeoka, Hitoshi & Watanabe, Yasutora, 2023. "Policy Diffusion through Elections," IZA Discussion Papers 16275, Institute of Labor Economics (IZA).
    4. 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.
    5. Jaume Puig‐Junoy & Jaime Pinilla, 2020. "Free prescriptions for low‐income pensioners? The cost of returning to free‐of‐charge drugs in the Spanish National Health Service," Health Economics, John Wiley & Sons, Ltd., vol. 29(12), pages 1804-1812, December.
    6. Cheolmin Kang & Akira Kawamura & Haruko Noguchi, 2019. "Does Free Healthcare Affect Children's Healthcare Use and Outcomes?," Working Papers 1914, Waseda University, Faculty of Political Science and Economics.
    7. Hirotaka Kato & Rei Goto & Taishi Tsuji & Katsunori Kondo, 2022. "The effects of patient cost-sharing on health expenditure and health among older people: Heterogeneity across income groups," The European Journal of Health Economics, Springer;Deutsche Gesellschaft für Gesundheitsökonomie (DGGÖ), vol. 23(5), pages 847-861, July.
    8. Kang, Cheolmin & Kawamura, Akira & Noguchi, Haruko, 2022. "Does free healthcare improve children's healthcare use and outcomes? Evidence from Japan's healthcare subsidy for young children," Journal of Economic Behavior & Organization, Elsevier, vol. 202(C), pages 372-406.
    9. Shen, Menghan & He, Wen & Li, Linyan, 2020. "Incentives to use primary care and their impact on healthcare utilization: Evidence using a public health insurance dataset in China," Social Science & Medicine, Elsevier, vol. 255(C).

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    Keywords

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    JEL classification:

    • I18 - Health, Education, and Welfare - - Health - - - Government Policy; Regulation; Public Health
    • I13 - Health, Education, and Welfare - - Health - - - Health Insurance, Public and Private
    • I11 - Health, Education, and Welfare - - Health - - - Analysis of Health Care Markets
    • J13 - Labor and Demographic Economics - - Demographic Economics - - - Fertility; Family Planning; Child Care; Children; Youth

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