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“Do I really need to go to rehab? I’d say no, no, no.” Estimating Price Elasticities of Convalescent Care Programs

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Abstract

This study is the first to estimate the price elasticities of demand for both medical rehabilitation programs and treatment at health spas. In Germany, the Statutory Health Insurance (SHI) covers both forms of therapy if administered in authorized medical facilities on referral from a physician. While health resort stays are prescribed to recover from general symptoms of poor health and are preventive in character, medical rehabilitation implies recovering from a specific illness or accident. From 1997 onwards, the German government more than doubled the copayments for both types of health care services from DM 12 (e6.14) to DM 25 (e12.78) per day for those insured under the SHI. Using longitudinal microdata from the German Socio-Economic Panel Study (SOEP), this exogenous price variation allows us to study the causal effects on demand, since we have a sound control group available. The data suggest that pull-forward effects in 1996 accounted for up to one-fifth of the subsequent decrease in demand. Taking this anticipation effect into account, we show that the reform induced a decrease in total demand of about 20 percent. We estimate the price elasticity for rehabilitation programs that aim at preventing work incapacity to be about -0.15, whereas the elasticity for rehabilitation programs for recovery from work accidents lies around -0.30. In contrast, the price elasticity for treatment at health spas is elastic and lies between -1 and -2.5.

Suggested Citation

  • Ziebarth N, 2009. "“Do I really need to go to rehab? I’d say no, no, no.” Estimating Price Elasticities of Convalescent Care Programs," Health, Econometrics and Data Group (HEDG) Working Papers 09/27, HEDG, c/o Department of Economics, University of York.
  • Handle: RePEc:yor:hectdg:09/27
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    References listed on IDEAS

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    Cited by:

    1. Herr, A. & Suppliet, M., 2011. "Co-Payment Exemptions and Reference Prices: an Empirical Study of Pharmaceutical Prices in Germany," Health, Econometrics and Data Group (HEDG) Working Papers 11/18, HEDG, c/o Department of Economics, University of York.
    2. Pilny, Adam & Wübker, Ansgar & Ziebarth, Nicolas R., 2017. "Introducing risk adjustment and free health plan choice in employer-based health insurance: Evidence from Germany," Journal of Health Economics, Elsevier, vol. 56(C), pages 330-351.
    3. Ziebarth, Nicolas R., 2017. "Social Insurance and Health," IZA Discussion Papers 10918, Institute for the Study of Labor (IZA).
    4. repec:kap:pubcho:v:171:y:2017:i:1:d:10.1007_s11127-016-0399-3 is not listed on IDEAS
    5. Christian Bünnings & Hendrik Schmitz & Harald Tauchmann & Nicolas R. Ziebarth, 2015. "How Health Plan Enrollees Value Prices Relative to Supplemental Benefits and Service Quality," Ruhr Economic Papers 0545, Rheinisch-Westfälisches Institut für Wirtschaftsforschung, Ruhr-Universität Bochum, Universität Dortmund, Universität Duisburg-Essen.
    6. Bunnings, C,; & Schmitz, H,; & Tauchmann, H,; & Ziebarth, N.R,;, 2015. "How Health Plan Enrollees Value Prices Relative to Supplemental Benefits and Service Quality," Health, Econometrics and Data Group (HEDG) Working Papers 15/02, HEDG, c/o Department of Economics, University of York.
    7. Richard V. Burkhauser & Mary C. Daly & Nicolas R. Ziebarth, 2016. "Protecting working-age people with disabilities: experiences of four industrialized nations
      [Absicherung von Personen mit Erwerbsminderung: Erfahrungen aus vier Industrieländern]
      ," Journal for Labour Market Research, Springer;Institute for Employment Research/ Institut für Arbeitsmarkt- und Berufsforschung (IAB), vol. 49(4), pages 367-386, December.
    8. Nicolas R. Ziebarth & Martin Karlsson, 2014. "The Effects Of Expanding The Generosity Of The Statutory Sickness Insurance System," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 29(2), pages 208-230, March.
    9. Nicolas Ziebarth, 2014. "Assessing the effectiveness of health care cost containment measures: evidence from the market for rehabilitation care," International Journal of Health Economics and Management, Springer, vol. 14(1), pages 41-67, March.
    10. repec:zbw:rwirep:0545 is not listed on IDEAS
    11. Udo Schneider & Roland Linder & Frank Verheyen, 2016. "Long-term sick leave and the impact of a graded return-to-work program: evidence from Germany," The European Journal of Health Economics, Springer;Deutsche Gesellschaft für Gesundheitsökonomie (DGGÖ), vol. 17(5), pages 629-643, June.
    12. Woodard, Joshua, 2016. "Estimation of Insurance Deductible Demand under Endogenous Premium Rates," 2016 Annual Meeting, July 31-August 2, 2016, Boston, Massachusetts 236151, Agricultural and Applied Economics Association.

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    Keywords

    convalescent care; health spa; medical rehabilitation; price elasticities; SOEP;

    JEL classification:

    • H51 - Public Economics - - National Government Expenditures and Related Policies - - - Government Expenditures and Health
    • I11 - Health, Education, and Welfare - - Health - - - Analysis of Health Care Markets
    • I18 - Health, Education, and Welfare - - Health - - - Government Policy; Regulation; Public Health
    • J22 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Time Allocation and Labor Supply

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