The demand for medical care in Japan: initial findings from a Japanese natural experiment

Mari Kan and Wataru Suzuki

Applied Economics Letters, 2006, vol. 13, issue 5, 273-277

Abstract: This study examines the effect of the 1997 increase in the coinsurance rate for household heads on the demand for medical care and estimates the price elasticity of demand using the change as a natural experiment. It analyses both outpatient and inpatient utilization by using health insurance claim data from 111 insurance associations. A differences-in-differences type estimator is employed with household heads as the treatment group and dependents as the control group. This represents the first comprehensive analysis of medical care demand in Japan using a natural experiment. The results indicate a price elasticity of outpatient care ranging from -0.05 to -0.06 but no significant effects on inpatient care of the increase in cost sharing. The price elasticity for outpatient care is lower than those from previous studies that have used observational comparisons of individuals in Japan and also smaller than those derived from a randomized experiment in the USA.

Date: 2006
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Persistent link: https://EconPapers.repec.org/RePEc:taf:apeclt:v:13:y:2006:i:5:p:273-277

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DOI: 10.1080/13504850500398583

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