Patient Cost-Sharing and Hospitalization Offsets in the Elderly

Amitabh Chandra, Jonathan Gruber and Robin McKnight

American Economic Review, 2010, vol. 100, issue 1, 193-213

Abstract: In the Medicare program, increases in cost sharing by a supplemental insurer can exert financial externalities. We study a policy change that raised patient cost sharing for the supplemental insurer for retired public employees in California. We find that physician visits and prescription drug usage have elasticities that are similar to those of the RAND Health Insurance Experiment (HIE). Unlike the HIE, however, we find substantial "offset" effects in terms of increased hospital utilization. The savings from increased cost sharing accrue mostly to the supplemental insurer, while the costs of increased hospitalization accrue mostly to Medicare. (JEL G22, I12, I18, J14)

JEL-codes: G22 I12 I18 J14 (search for similar items in EconPapers)
Date: 2010
Note: DOI: 10.1257/aer.100.1.193
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Citations: View citations in EconPapers (141)

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Working Paper: Patient Cost-Sharing and Hospitalization Offsets in the Elderly (2009)
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