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The effects of patient cost-sharing on health expenditure and health among older people: Heterogeneity across income groups

Author

Listed:
  • Hirotaka Kato

    (Keio University
    Keio University)

  • Rei Goto

    (Keio University)

  • Taishi Tsuji

    (Chiba University
    University of Tsukuba)

  • Katsunori Kondo

    (Chiba University
    Center for Gerontology and Social Science, National Center for Geriatrics and Gerontology)

Abstract

Despite rapidly rising health expenditure associated with population aging, empirical evidence on the effects of cost-sharing on older people is still limited. This study estimated the effects of cost-sharing on the utilization of healthcare and health among older people, the most intensive users of healthcare. We employed a regression discontinuity design by exploiting a drastic reduction in the coinsurance rate from 30 to 10% at age 70 in Japan. We used large administrative claims data as well as income information at the individual level provided by a municipality. Using the claims data with 1,420,252 person-month observations for health expenditure, we found that reduced cost-sharing modestly increased outpatient expenditure, with an implied price elasticity of – 0.07. When examining the effects of reduced cost-sharing by income, we found that the price elasticities for outpatient expenditure were almost zero, – 0.08, and – 0.11 for lower-, middle-, and higher-income individuals, respectively, suggesting that lower-income individuals do not have more elastic demand for outpatient care compared with other income groups. Using large-scale mail survey data with 3404 observations for self-reported health, we found that the cost-sharing reduction significantly improved self-reported health only among lower-income individuals, but drawing clear conclusions about health outcomes is difficult because of a lack of strong graphical evidence to support health improvement. Our results suggest that varying cost-sharing by income for older people (i.e., smaller cost-sharing for lower-income individuals and larger cost-sharing for higher-income individuals) may reduce health expenditure without compromising health.

Suggested Citation

  • Hirotaka Kato & Rei Goto & Taishi Tsuji & Katsunori Kondo, 2022. "The effects of patient cost-sharing on health expenditure and health among older people: Heterogeneity across income groups," The European Journal of Health Economics, Springer;Deutsche Gesellschaft für Gesundheitsökonomie (DGGÖ), vol. 23(5), pages 847-861, July.
  • Handle: RePEc:spr:eujhec:v:23:y:2022:i:5:d:10.1007_s10198-021-01399-6
    DOI: 10.1007/s10198-021-01399-6
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    More about this item

    Keywords

    Health expenditure; Cost-sharing; Older people; Income inequality; Regression discontinuity design;
    All these keywords.

    JEL classification:

    • I13 - Health, Education, and Welfare - - Health - - - Health Insurance, Public and Private
    • I14 - Health, Education, and Welfare - - Health - - - Health and Inequality
    • I18 - Health, Education, and Welfare - - Health - - - Government Policy; Regulation; Public Health

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