Health insurance and the demand for medical care: Instrumental variable estimates using health insurer claims data

Abe Dunn

Journal of Health Economics, 2016, vol. 48, issue C, 74-88

Abstract: This paper takes a different approach to estimating demand for medical care that uses the negotiated prices between insurers and providers as an instrument. The instrument is viewed as a textbook “cost shifting” instrument that impacts plan offerings, but is unobserved by consumers. The paper finds a price elasticity of demand of around −0.20, matching the elasticity found in the RAND Health Insurance Experiment. The paper also studies within-market variation in demand for prescription drugs and other medical care services and obtains comparable price elasticity estimates.

Keywords: Medical care demand; Price elasticity; Insurance claims; Instrumental variable; Commercial health insurance (search for similar items in EconPapers)
JEL-codes: C26 I11 I13 (search for similar items in EconPapers)
Date: 2016
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (10)

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Related works:
Working Paper: Health Insurance and the Demand for Medical Care: Instrumental Variable Estimates Using Health Insurer Claims Data (2014)
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Persistent link: https://EconPapers.repec.org/RePEc:eee:jhecon:v:48:y:2016:i:c:p:74-88

DOI: 10.1016/j.jhealeco.2016.03.001

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