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New estimates of the demand for physical and mental health treatment

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  • Chad D. Meyerhoefer
  • Samuel H. Zuvekas

Abstract

Consumers' price responsiveness is central to US health‐care reform proposals, but the best available estimates are now more than 25 years old. We estimate health‐care demands by calculating expected end‐of‐year prices and incorporating them into a zero‐inflated ordered probit model applied to several overlapping panels of data from 1996 to 2003. Results from our correlated random effects specification indicate that the price responsiveness of ambulatory mental health treatment has decreased substantially and is now slightly lower than physical health treatment. This suggests that concerns over moral hazard alone do not warrant less generous coverage for mental health. However, prescription drug demand is more price elastic. Published in 2009 by John Wiley & Sons, Ltd.

Suggested Citation

  • Chad D. Meyerhoefer & Samuel H. Zuvekas, 2010. "New estimates of the demand for physical and mental health treatment," Health Economics, John Wiley & Sons, Ltd., vol. 19(3), pages 297-315, March.
    • Handle: RePEc:wly:hlthec:v:19:y:2010:i:3:p:297-315
    DOI: 10.1002/hec.1476
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    1. Jill Furzer & Maripier Isabelle & Boriana Miloucheva & Audrey Laporte, 2023. "Public drug insurance, moral hazard and children's use of mental health medication: Latent mental health risk‐specific responses to lower out‐of‐pocket treatment costs," Health Economics, John Wiley & Sons, Ltd., vol. 32(2), pages 518-538, February.
    2. NicolasR. Ziebarth, 2010. "Estimating Price Elasticities of Convalescent Care Programmes," Economic Journal, Royal Economic Society, vol. 120(545), pages 816-844, June.
    3. Randall P. Ellis & Shenyi Jiang & Tzu-Chun Kuo, 2013. "Does service-level spending show evidence of selection across health plan types?," Applied Economics, Taylor & Francis Journals, vol. 45(13), pages 1701-1712, May.
    4. Mayank Aggarwal & Anindya S. Chakrabarti & Chirantan Chatterjee, 2023. "Movies, stigma and choice: Evidence from the pharmaceutical industry," Health Economics, John Wiley & Sons, Ltd., vol. 32(5), pages 1019-1039, May.
    5. Helmut Farbmacher & Peter Ihle & Ingrid Schubert & Joachim Winter & Amelie Wuppermann, 2017. "Heterogeneous Effects of a Nonlinear Price Schedule for Outpatient Care," Health Economics, John Wiley & Sons, Ltd., vol. 26(10), pages 1234-1248, October.
    6. Lizhong Peng & Chad D. Meyerhoefer & Samuel H. Zuvekas, 2016. "The Short‐Term Effect of Depressive Symptoms on Labor Market Outcomes," Health Economics, John Wiley & Sons, Ltd., vol. 25(10), pages 1223-1238, October.
    7. Jill Furzer & Maripier Isabelle & Boriana Miloucheva & Audrey Laporte, 2021. "Public drug insurance and children’s use of mental health medication: Risk-specific responses to lower out-of-pocket treatment costs," CIRANO Working Papers 2021s-34, CIRANO.
    8. Sarah Brown & Mark N. Harris & Christopher Spencer, 2020. "Modelling Category Inflation with Multiple Inflation Processes: Estimation, Specification and Testing," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 82(6), pages 1342-1361, December.
    9. Sabrina Terrizzi & Chad Meyerhoefer, 2020. "Estimates Of The Price Elasticity Of Switching Between Branded And Generic Drugs," Contemporary Economic Policy, Western Economic Association International, vol. 38(1), pages 94-108, January.
    10. Chad D. Meyerhoefer & Samuel H. Zuvekas & Richard Manski, 2014. "The Demand For Preventive And Restorative Dental Services," Health Economics, John Wiley & Sons, Ltd., vol. 23(1), pages 14-32, January.
    11. Chad D. Meyerhoefer & Samuel H. Zuvekas & Bita Fayaz Farkhad & John F. Moeller & Richard J. Manski, 2019. "The demand for preventive and restorative dental services among older adults," Health Economics, John Wiley & Sons, Ltd., vol. 28(9), pages 1151-1158, September.

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