Differences in price elasticities of demand for health insurance: a systematic review

Jonas Pendzialek (), Dusan Simic and Stephanie Stock

The European Journal of Health Economics, 2016, vol. 17, issue 1, 5-21

Abstract: Many health insurance systems apply managed competition principles to control costs and quality of health care. Besides other factors, managed competition relies on a sufficient price-elastic demand. This paper presents a systematic review of empirical studies on price elasticity of demand for health insurance. The objective was to identify the differing international ranges of price elasticity and to find socio-economic as well as setting-oriented factors that influence price elasticity. Relevant literature for the topic was identified through a two-step identification process including a systematic search in appropriate databases and further searches within the references of the results. A total of 45 studies from countries such as the USA, Germany, the Netherlands, and Switzerland were found. Clear differences in price elasticity by countries were identified. While empirical studies showed a range between −0.2 and −1.0 for optional primary health insurance in the US, higher price elasticities between −0.6 and −4.2 for Germany and around −2 for Switzerland were calculated for mandatory primary health insurance. Dutch studies found price elasticities below −0.5. In consideration of all relevant studies, age and poorer health status were identified to decrease price elasticity. Other socio-economic factors had an unclear impact or too limited evidence. Premium level, range of premiums, homogeneity of benefits/coverage and degree of forced decision were found to have a major influence on price elasticity in their settings. Further influence was found from supplementary insurance and premium-dependent employer contribution. Copyright Springer-Verlag Berlin Heidelberg 2016

Keywords: Health insurance; Price elasticity; Systematic review; Managed competition; I13; G22; D12 (search for similar items in EconPapers)
Date: 2016
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Citations: View citations in EconPapers (26)

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DOI: 10.1007/s10198-014-0650-0

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