Does the framing of patient cost-sharing incentives matter? The effects of deductibles vs. no-claim refunds

Tobias Klein, Martin Salm and Arthur Hayen

No 12908, CEPR Discussion Papers from C.E.P.R. Discussion Papers

Abstract: Understanding how health care utilization responds to cost-sharing incentives is of central importance for providing high quality care and limiting the growth of costs. While there is compelling evidence that patients react to financial incentives, it is less well understood how and why specific aspects of the design of contracts shape the size of this reaction. In this paper, we focus on the question whether the framing of cost-sharing incentives has an effect on health care utilization. To study this we make use of a policy change that occurred in the Netherlands. Until 2007, patients received a no-claim refund if they consumed little or no health care; from 2008 onward there was a deductible instead. This means that very similar economic incentives were first framed in terms of smaller gains and later as losses. We use claims-level data for a broad sample from the Dutch population to estimate whether the reaction to economic incentives was affected by this. Our empirical approach exploits within-year variation using an instrumental variables approach while controlling for differences across years. Our central finding is that patients react to incentives much more strongly when they are framed in terms of losses. Simulations based on our estimates show that the effect on yearly spending is 8.6 percent. This suggests that discussions on the optimal design of cost-sharing incentives should not only involve coinsurance rates and cost-sharing limits, but also how these are presented to patients.

Keywords: Patient cost-sharing; Health insurance; Framing (search for similar items in EconPapers)
JEL-codes: D91 H51 I13 (search for similar items in EconPapers)
Date: 2018-05
New Economics Papers: this item is included in nep-hea, nep-ias, nep-pbe and nep-upt
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (9)

Downloads: (external link)
https://cepr.org/publications/DP12908 (application/pdf)
CEPR Discussion Papers are free to download for our researchers, subscribers and members. If you fall into one of these categories but have trouble downloading our papers, please contact us at subscribers@cepr.org

Related works:
Journal Article: Does the framing of patient cost-sharing incentives matter? the effects of deductibles vs. no-claim refunds (2021)
Working Paper: Does the framing of patient cost-sharing incentives matter? The effects of deductibles vs. no-claim refunds (2019)
Working Paper: Does the Framing of Patient Cost-Sharing Incentives Matter? The Effects of Deductibles vs. No-Claim Refunds (2018)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:cpr:ceprdp:12908

Ordering information: This working paper can be ordered from
https://cepr.org/publications/DP12908

Access Statistics for this paper

More papers in CEPR Discussion Papers from C.E.P.R. Discussion Papers Centre for Economic Policy Research, 33 Great Sutton Street, London EC1V 0DX.
Bibliographic data for series maintained by ().