The Effect of Patient Cost Sharing on Utilization, Health, and Risk Protection

Hitoshi Shigeoka

NBER Working Paper No. 19726
Issued in December 2013
NBER Program(s):Health Care

This paper exploits a sharp reduction in patient cost sharing at age 70 in Japan, using a regression discontinuity design to examine its effect on utilization, health, and financial risk arising from out-of-pocket expenditures. Due to the national policy, cost sharing is 60-80 percent lower at age 70 than at age 69. I find that both outpatient and inpatient care are price sensitive among the elderly. While I find little impact on mortality and other health outcomes, the results show that reduced cost sharing is associated with lower out-of-pocket expenditures, especially at the right tail of the distribution.

Acknowledgments

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Document Object Identifier (DOI): 10.3386/w19726

Published: Hitoshi Shigeoka, 2014. "The Effect of Patient Cost Sharing on Utilization, Health, and Risk Protection," American Economic Review, American Economic Association, vol. 104(7), pages 2152-84, July. citation courtesy of