The Impacts of the Billing System on Healthcare Utilization: The Case of Thai Civil Servant Medical Benefit Scheme

Nada Wasi, Jirawat Panpiemras and Wanwiphang Manachotphong

No 48, PIER Discussion Papers from Puey Ungphakorn Institute for Economic Research

Abstract: While a large number of health insurance studies find that an increase in cost-sharing reduces healthcare demand, little has looked at the effect of a policy change operating through a non-price channel. This paper examines how a billing process can affect healthcare utilization given no change in price. Specifically, we look at the launch of the Direct Billing Payment program (DBP) to the Thai Civil Servant Medical Benefit Scheme. In the past, although the outpatient care is essentially free, its beneficiaries must pay at the point of services and get their money reimbursed later. The DBP allows the hospitals to charge the government directly. Using patient-level panel data from a large regional hospital, we find that the new billing system affects utilization through multiple channels. First, it increases the number of outpatient visits. Second, for each visit, the treatment costs and the share of prescription drug charge are higher. These impacts are found to be persistent over time, although less so in the case of visits. In addition, our analysis suggests that the likely cash constrained patients increase their utilization more proportionally.

Keywords: Health Insurance; Healthcare Demand; Direct Billing Payment; Thai Civil Servant Medical Benefit Scheme (search for similar items in EconPapers)
JEL-codes: I12 I13 I18 (search for similar items in EconPapers)
Pages: 33 pages
Date: 2016-11
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