How price responsive is the demand for specialty care?

Area of Science:

• Health Economics
• Healthcare Policy
• Clinical Research

Background:

• Outpatient co-payments for specialty care have risen.
• Understanding patient response to price changes is crucial for healthcare policy.

Purpose of the Study:

• To estimate patient response to a significant co-payment increase for specialty care among veterans with hypertension.
• To analyze the impact of a $15 to $50 co-payment rise on healthcare utilization and expenditures.

Main Methods:

• Retrospective cohort study comparing veterans with and without co-payments, using propensity score matching.
• Employed a two-part mixed-effects model to estimate specialty care expenditures over time.
• Compared correlated and uncorrelated two-part models for longitudinal analysis.

Main Results:

• A $35 increase in co-payments did not alter the likelihood of seeking specialty care.
• Co-payment increase led to reduced specialty care expenditures among users over time.
• Price responsiveness (semi-elasticity) for specialty care shifted from -0.25 to -0.31.

Conclusions:

• Increased specialty visit co-payments can effectively reduce healthcare expenditures for patients using Veterans Affairs medical centers.
• Advanced two-part model methods can enhance longitudinal expenditure analysis.