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Demand Response To Cost Sharing Under Managed Health Care

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  • CHUNLING LU
  • RICHARD G. FRANK
  • THOMAS G. MCGUIRE

Abstract

We use 1996 Medical Expenditure Panel Survey to examine the demand response of ambulatory medical services to demand‐side cost sharing under managed health care and find that demand response to a coinsurance rate is less than that under conventional plans. To address the selection problem, only respondents who were offered a single insurance plan from private establishments are studied. Our results show that managed care, relying on different approaches to ration, has blunted demand response. This suggests that in a managed care context, increasing demand‐side cost sharing will reduce costs to plans mainly by shifting costs to enrollees. (JEL I11)

Suggested Citation

  • Chunling Lu & Richard G. Frank & Thomas G. Mcguire, 2009. "Demand Response To Cost Sharing Under Managed Health Care," Contemporary Economic Policy, Western Economic Association International, vol. 27(1), pages 1-15, January.
    • Handle: RePEc:bla:coecpo:v:27:y:2009:i:1:p:1-15
    DOI: 10.1111/j.1465-7287.2008.00124.x
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    References listed on IDEAS

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    Cited by:

    1. repec:sgm:pzwzuw:v:1:i:2:y:2013:p:93-111 is not listed on IDEAS
    2. Maria Magdalena Kozber & Magdalena Osak, 2013. "Wspolplacenie bezposrednie w bazowym systemie zabezpieczenia zdrowotnego – doswiadczenia Szwajcarii. (Direct cost sharing in the basic health system – Swiss experience.)," Problemy Zarzadzania, University of Warsaw, Faculty of Management, vol. 11(41), pages 93-111.

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    More about this item

    JEL classification:

    • I11 - Health, Education, and Welfare - - Health - - - Analysis of Health Care Markets

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