Patient Cost-Sharing and Healthcare Utilization in Early Childhood: Evidence from a Regression Discontinuity Design

Tzu-Ting Yang, Hsing-Wen Han and Hsienming Lien (hmlien@nccu.edu.tw)

No 14C003, Working Papers from Canadian Centre for Health Economics

Abstract: Healthcare for young children is highly subsidized in many public health insurance programs around the world. However, the existing literature lacks evidence on how the demand for young children's healthcare reacts to these medical subsidy policies. This paper exploits a sharp increase in the required level of patient cost-sharing, the share of healthcare costs the patient must pay out of their own pocket, at age 3 in Taiwan that results from young children "aging out" of the cost-sharing subsidy. This price shock on the 3rd birthday allows us to use a regression discontinuity design to examine the causal effect of cost sharing on the demand for young children's healthcare by comparing the expenditure and utilization of healthcare for young children right before and after the 3rd birthday. Our results show that the increase in the level of patient cost sharing at the 3rd birthday significantly reduces total outpatient expenditure. The implied price elasticity of outpatient expenditure is around -0.10. However, the demand for inpatient care for young children does not respond to a change in cost sharing at the 3rd birthday even though the price variation is much larger. This result implies that the full coverage of inpatient care could improve the welfare of young children.

Keywords: patient cost-sharing; health insurance; children health (search for similar items in EconPapers)
JEL-codes: G22 I12 I18 J13 (search for similar items in EconPapers)
Pages: 43 pages
Date: 2014-08
New Economics Papers: this item is included in nep-hea and nep-ias
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (4)

Published Online, September 2014

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http://www.canadiancentreforhealtheconomics.ca/wp- ... /10/Yang-et-al-R.pdf Revised version, 2014 (application/pdf)

Related works:
Working Paper: Patient Cost Sharing and Healthcare Utilization in Early Childhood: Evidence from a Regression Discontinuity Design (2016)
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