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An Econometric Model of Healthcare Demand With Nonlinear Pricing
Johannes S Kunz1, Rainer Winkelmann1,2
1Department of Economics, University of Zurich, Zurich, Switzerland.
Health Economics
|April 6, 2016
Summary
German social health insurance co-payments for doctor visits did not affect patient demand. A new model analyzing patient data found no significant impact on the number of visits per quarter.
Area of Science:
- Health Economics
- Econometrics
- Public Health Policy
Background:
- German social health insurance implemented a co-payment for the first doctor visit per quarter from 2004 to 2012.
- Understanding the impact of such cost-sharing policies on healthcare utilization is crucial for health policy.
- Previous studies may not have adequately captured the nuanced effects on patient visit frequency.
Purpose of the Study:
- To develop and apply a novel model for estimating the effect of a co-payment policy on the number of doctor visits per individual per quarter.
- To identify the causal effect of the co-payment reform on healthcare demand.
- To account for potential data reporting discrepancies in the analysis.
Main Methods:
- Development of a new econometric model combining a hazard rate model with a difference-in-differences strategy.
- The hazard rate model captures the timing of doctor visits, incorporating a one-time increase due to the co-payment.
- Utilized data from the German Socio-Economic Panel (SOEP) for empirical analysis.
Main Results:
- The study found no statistically significant effect of the co-payment on the demand for doctor visits.
- Neither the basic nor the extended model version, which accounted for reporting period mismatches, revealed a discernible impact.
- The analysis indicates that the co-payment policy did not alter the number of doctor visits individuals sought per quarter.
Conclusions:
- The implemented co-payment policy in German social health insurance did not influence the overall demand for outpatient doctor visits.
- The findings suggest that cost-sharing mechanisms, at this specific level and design, may not be an effective tool for reducing healthcare utilization.
- Further research could explore different co-payment designs or patient populations to understand potential variations in impact.
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