IDEAS home Printed from https://ideas.repec.org/p/sip/dpaper/14-014.html
   My bibliography  Save this paper

Heterogeneous effect of coinsurance rate on healthcare costs: generalized finite mixtures and matching estimators

Author

Listed:
  • Galina Besstremyannaya

    () (Stanford University)

Abstract

The paper proposes a combination of finite mixture models and matching estimators to account for heterogeneous and nonlinear effects of the coinsurance rate on healthcare expenditure. We use loglinear model and generalized linear models with different distribution families, and measure the conditional average treatment effect of a rise in the coinsurance rate in each component of the model. The estimations with panel data for adult Japanese consumers in 2008-2010 and for female consumers in 2000-2010 demonstrate the presence of subpopulations with high, medium and low healthcare expenditure, and subpopulation membership is explained by lifestyle variables. Generalized linear models provide adequate fit compared to loglinear model. Conditional average treatment effect estimations reveal the existence of nonlinear effects of the coinsurance rate in the subpopulation with high expenditure.

Suggested Citation

  • Galina Besstremyannaya, 2014. "Heterogeneous effect of coinsurance rate on healthcare costs: generalized finite mixtures and matching estimators," Discussion Papers 14-014, Stanford Institute for Economic Policy Research.
  • Handle: RePEc:sip:dpaper:14-014
    as

    Download full text from publisher

    File URL: http://www-siepr.stanford.edu/repec/sip/14-014.pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Richard K. Crump & V. Joseph Hotz & Guido W. Imbens & Oscar A. Mitnik, 2009. "Dealing with limited overlap in estimation of average treatment effects," Biometrika, Biometrika Trust, vol. 96(1), pages 187-199.
    2. Dardanoni V & Li Donni P, 2009. "The Effect Of Supplemental Insurance On Health Care Demand With Multiple Information: A Latent Class Analysis," Health, Econometrics and Data Group (HEDG) Working Papers 09/03, HEDG, c/o Department of Economics, University of York.
    3. Kondo, Akiko & Kawabuchi, Koichi, 2012. "Evaluation of the introduction of a diagnosis procedure combination system for patient outcome and hospitalisation charges for patients with hip fracture or lung cancer in Japan," Health Policy, Elsevier, vol. 107(2), pages 184-193.
    4. Heckman, James & Singer, Burton, 1984. "A Method for Minimizing the Impact of Distributional Assumptions in Econometric Models for Duration Data," Econometrica, Econometric Society, vol. 52(2), pages 271-320, March.
    5. Cameron,A. Colin & Trivedi,Pravin K., 2013. "Regression Analysis of Count Data," Cambridge Books, Cambridge University Press, number 9781107667273.
    6. Chiappori, Pierre-Andre & Durand, Franck & Geoffard, Pierre-Yves, 1998. "Moral hazard and the demand for physician services: First lessons from a French natural experiment," European Economic Review, Elsevier, vol. 42(3-5), pages 499-511, May.
    7. Okamura, Shinichi & Kobayashi, Ryota & Sakamaki, Tetsuo, 2005. "Case-mix payment in Japanese medical care," Health Policy, Elsevier, vol. 74(3), pages 282-286, November.
    8. Vincenzo Atella & Francesco Brindisi & Partha Deb & Furio C. Rosati, 2004. "Determinants of access to physician services in Italy: a latent class seemingly unrelated probit approach," Health Economics, John Wiley & Sons, Ltd., vol. 13(7), pages 657-668, July.
    9. Mullahy, John, 1998. "Much ado about two: reconsidering retransformation and the two-part model in health econometrics," Journal of Health Economics, Elsevier, vol. 17(3), pages 247-281, June.
    10. John Mullahy, 1998. "Much Ado About Two: Reconsidering Retransformation and the Two-Part Model in Health Economics," NBER Technical Working Papers 0228, National Bureau of Economic Research, Inc.
    11. Ileana Baldi & Eva Pagano & Paola Berchialla & Alessandro Desideri & Alberto Ferrando & Franco Merletti & Dario Gregori, 2013. "Modeling healthcare costs in simultaneous presence of asymmetry, heteroscedasticity and correlation," Journal of Applied Statistics, Taylor & Francis Journals, vol. 40(2), pages 298-310, February.
    12. Yutaka Imai, 2002. "Health Care Reform in Japan," OECD Economics Department Working Papers 321, OECD Publishing.
    13. Deb Partha & Trivedi Pravin K., 2013. "Finite Mixture for Panels with Fixed Effects," Journal of Econometric Methods, De Gruyter, vol. 2(1), pages 35-51, July.
    14. Jones, A. M. & Lomas, J. & Moore, P. & Rice, N., 2013. "A quasi-Monte Carlo comparison of developments in parametric and semi-parametric regression methods for heavy tailed and non-normal data: with an application to healthcare costs," Health, Econometrics and Data Group (HEDG) Working Papers 13/30, HEDG, c/o Department of Economics, University of York.
    15. Hitoshi Shigeoka, 2014. "The Effect of Patient Cost Sharing on Utilization, Health, and Risk Protection," American Economic Review, American Economic Association, vol. 104(7), pages 2152-2184, July.
    16. Keisuke Hirano & Guido W. Imbens & Geert Ridder, 2003. "Efficient Estimation of Average Treatment Effects Using the Estimated Propensity Score," Econometrica, Econometric Society, vol. 71(4), pages 1161-1189, July.
    17. Deb, Partha & Trivedi, Pravin K., 2002. "The structure of demand for health care: latent class versus two-part models," Journal of Health Economics, Elsevier, vol. 21(4), pages 601-625, July.
    18. Grossman, Michael, 1972. "On the Concept of Health Capital and the Demand for Health," Journal of Political Economy, University of Chicago Press, vol. 80(2), pages 223-255, March-Apr.
    19. Esther W. de Bekker‐Grob & Mandy Ryan & Karen Gerard, 2012. "Discrete choice experiments in health economics: a review of the literature," Health Economics, John Wiley & Sons, Ltd., vol. 21(2), pages 145-172, February.
    20. Hole, Arne Risa, 2008. "Modelling heterogeneity in patients' preferences for the attributes of a general practitioner appointment," Journal of Health Economics, Elsevier, vol. 27(4), pages 1078-1094, July.
    21. Masanori Hashimoto, 1990. "The Japanese Labor Market in a Comparative Perspective with the United States," Books from Upjohn Press, W.E. Upjohn Institute for Employment Research, number jlm, January-J.
    22. Tokita, Tadahiko & Kumamoto, Hisao & Hosoya, Kei & Hayashi, Yukinari, 2002. "A Claim Data Analysis of Medical Fee Revision," Economic Review, Hitotsubashi University, vol. 53(3), pages 226-235, July.
    23. James J. Heckman & Vytlacil, Edward J., 2007. "Econometric Evaluation of Social Programs, Part I: Causal Models, Structural Models and Econometric Policy Evaluation," Handbook of Econometrics, in: J.J. Heckman & E.E. Leamer (ed.), Handbook of Econometrics, edition 1, volume 6, chapter 70, Elsevier.
    24. Mari Kan & Wataru Suzuki, 2006. "The demand for medical care in Japan: initial findings from a Japanese natural experiment," Applied Economics Letters, Taylor & Francis Journals, vol. 13(5), pages 273-277.
    25. Marisa Miraldo & Maria Goddard & Peter C Smith, 2006. "The incentive effects of payment by results," Working Papers 019cherp, Centre for Health Economics, University of York.
    26. Cockx, Bart & Brasseur, Carine, 2003. "The demand for physician services: Evidence from a natural experiment," Journal of Health Economics, Elsevier, vol. 22(6), pages 881-913, November.
    27. Guido W. Imbens & Jeffrey M. Wooldridge, 2009. "Recent Developments in the Econometrics of Program Evaluation," Journal of Economic Literature, American Economic Association, vol. 47(1), pages 5-86, March.
    28. Hendrik Schmitz, 2012. "More health care utilization with more insurance coverage? Evidence from a latent class model with German data," Applied Economics, Taylor & Francis Journals, vol. 44(34), pages 4455-4468, December.
    29. Nawata, Kazumitsu & Nitta, Ayako & Watanabe, Sonoko & Kawabuchi, Koichi, 2006. "An analysis of the length of stay and effectiveness of treatment for hip fracture patients in Japan: Evaluation of the 2002 revision of the medical service fee schedule," Journal of Health Economics, Elsevier, vol. 25(4), pages 722-739, July.
    30. Marianne Bertrand & Esther Duflo & Sendhil Mullainathan, 2004. "How Much Should We Trust Differences-In-Differences Estimates?," The Quarterly Journal of Economics, Oxford University Press, vol. 119(1), pages 249-275.
    31. Winkelmann, Rainer, 2006. "Reforming health care: Evidence from quantile regressions for counts," Journal of Health Economics, Elsevier, vol. 25(1), pages 131-145, January.
    32. Alberto Abadie & Guido W. Imbens, 2002. "Simple and Bias-Corrected Matching Estimators for Average Treatment Effects," NBER Technical Working Papers 0283, National Bureau of Economic Research, Inc.
    33. Deb, Partha & Trivedi, Pravin K, 1997. "Demand for Medical Care by the Elderly: A Finite Mixture Approach," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 12(3), pages 313-336, May-June.
    34. Buntin, Melinda Beeuwkes & Zaslavsky, Alan M., 2004. "Too much ado about two-part models and transformation?: Comparing methods of modeling Medicare expenditures," Journal of Health Economics, Elsevier, vol. 23(3), pages 525-542, May.
    35. Sergi Jiménez-Martín & José Labeaga & Maite Martínez-Granado, 2004. "An empirical analysis of the demand for physician services across the European Union," The European Journal of Health Economics, Springer;Deutsche Gesellschaft für Gesundheitsökonomie (DGGÖ), vol. 5(2), pages 150-165, May.
    36. Guido W. Imbens, 2004. "Nonparametric Estimation of Average Treatment Effects Under Exogeneity: A Review," The Review of Economics and Statistics, MIT Press, vol. 86(1), pages 4-29, February.
    37. Helmut Farbmacher & Peter Ihle & Ingrid Schubert & Joachim Winter & Amelie Wuppermann, 2017. "Heterogeneous Effects of a Nonlinear Price Schedule for Outpatient Care," Health Economics, John Wiley & Sons, Ltd., vol. 26(10), pages 1234-1248, October.
    38. Tokita, Tadahiko & Izumida, Nobuyuki & Konno, Hiroki & Yamada, Takeshi & Yamamoto, Katsuya, 2000. "A Claim Data Analysis for Japanese Medical Demand and Supply," Economic Review, Hitotsubashi University, vol. 51(4), pages 289-300, October.
    39. Duarte, Fabian, 2012. "Price elasticity of expenditure across health care services," Journal of Health Economics, Elsevier, vol. 31(6), pages 824-841.
    40. Barros, Pedro Pita & Machado, Matilde P. & Sanz-de-Galdeano, Anna, 2008. "Moral hazard and the demand for health services: A matching estimator approach," Journal of Health Economics, Elsevier, vol. 27(4), pages 1006-1025, July.
    41. Rainer Winkelmann, 2004. "Co‐payments for prescription drugs and the demand for doctor visits – Evidence from a natural experiment," Health Economics, John Wiley & Sons, Ltd., vol. 13(11), pages 1081-1089, November.
    42. Fujii, Mitsuru & Reich, Michael R., 1988. "Rising medical costs and the reform of Japan's health insurance system," Health Policy, Elsevier, vol. 9(1), pages 9-24.
    43. Leemore Dafny & David Dranove, 2006. "Regulatory Exploitation and the Market for Corporate Controls," NBER Working Papers 12438, National Bureau of Economic Research, Inc.
    44. Óscar D. Lourenço & Pedro L. Ferreira, 2005. "Utilization of public health centres in Portugal: effect of time costs and other determinants. Finite mixture models applied to truncated samples," Health Economics, John Wiley & Sons, Ltd., vol. 14(9), pages 939-953, September.
    45. Newhouse, Joseph P. & Phelps, Charles E. & Marquis, M. Susan, 1980. "On having your cake and eating it too : Econometric problems in estimating the demand for health services," Journal of Econometrics, Elsevier, vol. 13(3), pages 365-390, August.
    46. Andrews, Donald W. K., 1988. "Chi-square diagnostic tests for econometric models : Introduction and applications," Journal of Econometrics, Elsevier, vol. 37(1), pages 135-156, January.
    47. Sergi Jiménez‐Martín & José M. Labeaga & Maite Martínez‐Granado, 2002. "Latent class versus two‐part models in the demand for physician services across the European Union," Health Economics, John Wiley & Sons, Ltd., vol. 11(4), pages 301-321, June.
    48. Kondo, Ayako & Shigeoka, Hitoshi, 2013. "Effects of universal health insurance on health care utilization, and supply-side responses: Evidence from Japan," Journal of Public Economics, Elsevier, vol. 99(C), pages 1-23.
    49. Reichmann, Gerhard & Sommersguter-Reichmann, Margit, 2004. "Co-payments in the Austrian social health insurance system: Analysing patient behaviour and patients' views on the effects of co-payments," Health Policy, Elsevier, vol. 67(1), pages 75-91, January.
    50. Sisira Sarma & Wayne Simpson, 2006. "A microeconometric analysis of Canadian health care utilization," Health Economics, John Wiley & Sons, Ltd., vol. 15(3), pages 219-239, March.
    51. Ulf‐G. Gerdtham & Pravin K. Trivedi, 2001. "Equity in Swedish health care reconsidered: new results based on the finite mixture model," Health Economics, John Wiley & Sons, Ltd., vol. 10(6), pages 565-572, September.
    52. Wedel, M, et al, 1993. "A Latent Class Poisson Regression Model for Heterogeneous Count Data," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 8(4), pages 397-411, Oct.-Dec..
    53. Murat K. Munkin & Pravin K. Trivedi, 2010. "Disentangling incentives effects of insurance coverage from adverse selection in the case of drug expenditure: a finite mixture approach," Health Economics, John Wiley & Sons, Ltd., vol. 19(9), pages 1093-1108, September.
    54. Nawata, K. & Kawabuchi, K., 2013. "Evaluation of the DPC-based inclusive payment system in Japan for cataract operations by a new model," Mathematics and Computers in Simulation (MATCOM), Elsevier, vol. 93(C), pages 76-85.
    55. Atsushi Yoshida & Shingo Takagi, 2002. "Effects of the Reform of the Social Medical Insurance System in Japan," The Japanese Economic Review, Japanese Economic Association, vol. 53(4), pages 444-465, December.
    56. Crew, Michael A, 1969. "Coinsurance and the Welfare Economics of Medical Care," American Economic Review, American Economic Association, vol. 59(5), pages 906-908, December.
    57. Newhouse, Joseph P. & Byrne, Daniel J., 1988. "Did Medicare's Prospective Payment System cause length of stay to fall?," Journal of Health Economics, Elsevier, vol. 7(4), pages 413-416, December.
    58. Duan, Naihua, et al, 1983. "A Comparison of Alternative Models for the Demand for Medical Care," Journal of Business & Economic Statistics, American Statistical Association, vol. 1(2), pages 115-126, April.
    59. Keeler, Emmett B. & Rolph, John E., 1988. "The demand for episodes of treatment in the health insurance experiment," Journal of Health Economics, Elsevier, vol. 7(4), pages 337-367, December.
    60. Partha Deb & Ann M. Holmes, 2000. "Estimates of use and costs of behavioural health care: a comparison of standard and finite mixture models," Health Economics, John Wiley & Sons, Ltd., vol. 9(6), pages 475-489, September.
    61. Steven D. Levitt & John A. List, 2007. "What Do Laboratory Experiments Measuring Social Preferences Reveal About the Real World?," Journal of Economic Perspectives, American Economic Association, vol. 21(2), pages 153-174, Spring.
    62. Borislava Mihaylova & Andrew Briggs & Anthony O'Hagan & Simon G. Thompson, 2011. "Review of statistical methods for analysing healthcare resources and costs," Health Economics, John Wiley & Sons, Ltd., vol. 20(8), pages 897-916, August.
    63. Manning, Willard G. & Mullahy, John, 2001. "Estimating log models: to transform or not to transform?," Journal of Health Economics, Elsevier, vol. 20(4), pages 461-494, July.
    64. Greene, William, 2005. "Reconsidering heterogeneity in panel data estimators of the stochastic frontier model," Journal of Econometrics, Elsevier, vol. 126(2), pages 269-303, June.
    65. Andrews, Donald W K, 1988. "Chi-Square Diagnostic Tests for Econometric Models: Theory," Econometrica, Econometric Society, vol. 56(6), pages 1419-1453, November.
    66. Santos Silva, Joao M. C. & Windmeijer, Frank, 2001. "Two-part multiple spell models for health care demand," Journal of Econometrics, Elsevier, vol. 104(1), pages 67-89, August.
    67. Wouterse, Bram & Huisman, Martijn & Meijboom, Bert R. & Deeg, Dorly J.H. & Polder, Johan J., 2013. "Modeling the relationship between health and health care expenditures using a latent Markov model," Journal of Health Economics, Elsevier, vol. 32(2), pages 423-439.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Deepak Balasubramanian & Shankar Prinja & Arun Kumar Aggarwal, 2015. "Effect of User Charges on Secondary Level Surgical Care Utilization and Out-of-Pocket Expenditures in Haryana State, India," PLOS ONE, Public Library of Science, vol. 10(5), pages 1-15, May.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Besstremyannaya, Galina, 2017. "Measuring income equity in the demand for healthcare with finite mixture models," Applied Econometrics, Russian Presidential Academy of National Economy and Public Administration (RANEPA), vol. 46, pages 5-29.
    2. Kurt J. Lavetti & Thomas DeLeire & Nicolas R. Ziebarth, 2019. "How Do Low-Income Enrollees in the Affordable Care Act Marketplaces Respond to Cost-Sharing?," NBER Working Papers 26430, National Bureau of Economic Research, Inc.
    3. Galina Besstremyannaya, 2012. "Heterogeneous effect of coinsurance rate on the demand for health care: a finite mixture approach," Working Papers w0163, New Economic School (NES).
    4. Teresa Bago d'Uva, 2005. "Latent class models for use of primary care: evidence from a British panel," Health Economics, John Wiley & Sons, Ltd., vol. 14(9), pages 873-892, September.
    5. Jones, A.M, 2010. "Models For Health Care," Health, Econometrics and Data Group (HEDG) Working Papers 10/01, HEDG, c/o Department of Economics, University of York.
    6. Bago d'Uva, Teresa & Jones, Andrew M. & van Doorslaer, Eddy, 2009. "Measurement of horizontal inequity in health care utilisation using European panel data," Journal of Health Economics, Elsevier, vol. 28(2), pages 280-289, March.
    7. Galina Besstremyannaya, 2012. "Estimating income equity in social health insurance system," Working Papers w0172, New Economic School (NES).
    8. Óscar D. Lourenço & Pedro L. Ferreira, 2005. "Utilization of public health centres in Portugal: effect of time costs and other determinants. Finite mixture models applied to truncated samples," Health Economics, John Wiley & Sons, Ltd., vol. 14(9), pages 939-953, September.
    9. Borislava Mihaylova & Andrew Briggs & Anthony O'Hagan & Simon G. Thompson, 2011. "Review of statistical methods for analysing healthcare resources and costs," Health Economics, John Wiley & Sons, Ltd., vol. 20(8), pages 897-916, August.
    10. Richard Layte & Anne Nolan, 2015. "Eligibility for free GP care and the utilisation of GP services by children in Ireland," International Journal of Health Economics and Management, Springer, vol. 15(1), pages 3-27, March.
    11. Amanda Kowalski, 2016. "Censored Quantile Instrumental Variable Estimates of the Price Elasticity of Expenditure on Medical Care," Journal of Business & Economic Statistics, Taylor & Francis Journals, vol. 34(1), pages 107-117, January.
    12. Ziebarth, Nicolas R., 2017. "Social Insurance and Health," IZA Discussion Papers 10918, Institute of Labor Economics (IZA).
    13. Hudson, Eibhlin & Nolan, Anne, 2015. "Public healthcare eligibility and the utilisation of GP services by older people in Ireland," The Journal of the Economics of Ageing, Elsevier, vol. 6(C), pages 24-43.
    14. Bago d'Uva, Teresa & Jones, Andrew M., 2009. "Health care utilisation in Europe: New evidence from the ECHP," Journal of Health Economics, Elsevier, vol. 28(2), pages 265-279, March.
    15. Teresa Bago d'Uva, 2006. "Latent class models for utilisation of health care," Health Economics, John Wiley & Sons, Ltd., vol. 15(4), pages 329-343, April.
    16. Majo, M.C., 2010. "A microeconometric analysis of health care utilization in Europe," Other publications TiSEM 1cf5fd2f-8146-4ef8-8eb5-e, Tilburg University, School of Economics and Management.
    17. Jones, A. & Lomas, J. & Rice, N., 2014. "Going Beyond the Mean in Healthcare Cost Regressions: a Comparison of Methods for Estimating the Full Conditional Distribution," Health, Econometrics and Data Group (HEDG) Working Papers 14/26, HEDG, c/o Department of Economics, University of York.
    18. Yi Yao & Joan Schmit & Julie Shi, 2019. "Promoting sustainability for micro health insurance: a risk-adjusted subsidy approach for maternal healthcare service," The Geneva Papers on Risk and Insurance - Issues and Practice, Palgrave Macmillan;The Geneva Association, vol. 44(3), pages 382-409, July.
    19. Julie Shi & Yi Yao & Gordon Liu, 2018. "Modeling individual health care expenditures in China: Evidence to assist payment reform in public insurance," Health Economics, John Wiley & Sons, Ltd., vol. 27(12), pages 1945-1962, December.
    20. Óscar Lourenço & Carlota Quintal & Pedro Lopes Ferreira & Pedro Pita Barros, 2007. "A equidade na utilização de cuidados de saúde em Portugal: Uma avaliação baseada em modelos de contagem," Notas Económicas, Faculty of Economics, University of Coimbra, issue 25, pages 6-26, June.

    More about this item

    Keywords

    finite mixture model; generalized linear model; matching estimators;
    All these keywords.

    JEL classification:

    • C44 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods: Special Topics - - - Operations Research; Statistical Decision Theory
    • C61 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Optimization Techniques; Programming Models; Dynamic Analysis
    • I13 - Health, Education, and Welfare - - Health - - - Health Insurance, Public and Private

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:sip:dpaper:14-014. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Anne Shor) The email address of this maintainer does not seem to be valid anymore. Please ask Anne Shor to update the entry or send us the correct email address. General contact details of provider: https://edirc.repec.org/data/cestaus.html .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.