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Does the Framing of Patient Cost-Sharing Incentives Matter? The Effects of Deductibles vs. No-Claim Refunds

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Listed:
  • Hayen, Arthur P.

    (Tilburg University)

  • Klein, Tobias J.

    () (Tilburg University)

  • Salm, Martin

    () (Tilburg University)

Abstract

In light of increasing health care expenditures, patient cost-sharing schemes have emerged as one of the main policy tools to reduce medical spending. We show that the effect of patient cost-sharing schemes on health care expenditures is not only determined by the economic incentives they provide, but also by the way these economic incentives are framed. Patients react to changes in economic incentives almost twice as strongly under a deductible policy than under a no-claims refund policy. Our preferred explanation is that individuals are loss-averse and respond differently to both schemes because they perceive deductible payments as a loss and no-claim refunds as a gain.

Suggested Citation

  • Hayen, Arthur P. & Klein, Tobias J. & Salm, Martin, 2018. "Does the Framing of Patient Cost-Sharing Incentives Matter? The Effects of Deductibles vs. No-Claim Refunds," IZA Discussion Papers 11508, Institute for the Study of Labor (IZA).
  • Handle: RePEc:iza:izadps:dp11508
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    More about this item

    Keywords

    patient cost-sharing; health insurance; framing; loss aversion;

    JEL classification:

    • I13 - Health, Education, and Welfare - - Health - - - Health Insurance, Public and Private
    • D91 - Microeconomics - - Micro-Based Behavioral Economics - - - Role and Effects of Psychological, Emotional, Social, and Cognitive Factors on Decision Making
    • H51 - Public Economics - - National Government Expenditures and Related Policies - - - Government Expenditures and Health

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