A structural microsimulation model for demand-side cost-sharing in healthcare

Jan Boone and Minke Remmerswaal

Journal of Health Economics, 2024, vol. 97, issue C

Abstract: Demand-side cost-sharing reduces moral hazard in healthcare but increases exposure to out-of-pocket expenditure. We introduce a structural microsimulation model to evaluate both total and out-of-pocket expenditure for different cost-sharing schemes. We use a Bayesian mixture model to capture the healthcare expenditure distributions across different age–gender categories. We estimate the model using Dutch data and simulate outcomes for a number of policies. The model suggests that for a deductible of 300 euros shifting the starting point of the deductible away from zero to 400 euros leads to an average 4% reduction in healthcare expenditure and 47% lower out-of-pocket payments.

Keywords: Moral hazard; Out-of-pocket; Shifted deductible; Co-insurance; Bayesian mixture model; Microsimulation model (search for similar items in EconPapers)
Date: 2024
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Persistent link: https://EconPapers.repec.org/RePEc:eee:jhecon:v:97:y:2024:i:c:s0167629624000456

DOI: 10.1016/j.jhealeco.2024.102900

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