Healthcare Demand in the Presence of Discrete Price Changes

Michael Gerfin, Boris Kaiser and Christian Schmid

Health Economics, 2015, vol. 24, issue 9, 1164-1177

Abstract: Deductibles in health insurance generate nonlinear budget sets and dynamic incentives. Using detailed individual health expenditure data from a Swiss health insurer, we estimate the response in healthcare demand to the discrete price increase generated by resetting the deductible at the start of each calendar year. We find that for individuals with high deductibles, healthcare demand drops by 27%. The decrease is most pronounced for inpatient care and prescription drugs. By contrast, for individuals with low deductibles, there is no significant change in healthcare demand (except for prescription drugs). Overall our results suggest that healthy individuals respond much stronger to the price change. Copyright © 2015 John Wiley & Sons, Ltd.

Date: 2015
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https://doi.org/10.1002/hec.3154

Related works:
Working Paper: Health Care Demand in the Presence of Discrete Price Changes (2014)
Working Paper: Health Care Demand in the Presence of Discrete Price Changes (2014)
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Persistent link: https://EconPapers.repec.org/RePEc:wly:hlthec:v:24:y:2015:i:9:p:1164-1177

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