The effects of patient cost sharing on ambulatory utilization in South Korea

This study focused mainly on the effects of patient cost sharing on the demand for physician service, especially in the low-income people. Patient cost sharing is one of the policies used extensively in the health care financing in Korea, which has been adopted to control the health care cost. It has raised the argument that cost sharing inhibits low-income patients' access to affordable medical care. Data from the National Health and Nutrition Survey conducted 1998 by the Korean Ministry of Health and Welfare was used for this analysis. Multiple regression was done with the dependent variable of the amount of ambulatory utilization and price elasticities are estimated. We obtained significant out-of-pocket price elasticities depending on patient income levels and types of care facilities in the range of -0.21 to -0.07, -0.20 to -0.10, respectively. We found out that low-income patients are more sensitive to cost sharing than high-income patients. Furthermore, we found out that the users of general hospitals are less sensitive to cost sharing than the users of clinics. These results shows that the cost sharing policy in Korea does not efficiently work. Patient cost sharing in Korea induces inequitable medical service utilization and also it does not decrease moral hazard in the sense that the higher cost-sharing sector is less sensitive to cost sharing.