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The Effects of Copayments on Healthcare Utilization in Korea’s Medical Aid Program

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  • Lee Yong-Woo

    (School of Economics and Finance, Yeungnam University, 280 Daehak-ro, Gyeongsan38541, Korea (the Republic of))

  • Lee Yong-Ju

    (School of Economics and Finance, Yeungnam University, 280 Daehak-ro, Gyeongsan38541, Korea (the Republic of))

Abstract

This study empirically tests the effects of the introduction of copayments on healthcare utilization in the Korea’s medical aid program (MAP). Due to a growing concern about overutilization of public healthcare and government’s financial burden, the Korean government reformed the MAP in 2007 and introduced copayments for outpatient care of Type 1 enrollees who had borne no medical treatment cost until the reform. Exploiting the natural experiment of 2007 reform, we perform a difference-in-differences (DID) analysis with propensity score matching and conclude that the introduction of copayments reduces healthcare utilization in the short-run through heterogeneous effect on the outpatient services consumption distribution, but this effect rapidly disappears over time.

Suggested Citation

  • Lee Yong-Woo & Lee Yong-Ju, 2019. "The Effects of Copayments on Healthcare Utilization in Korea’s Medical Aid Program," The B.E. Journal of Economic Analysis & Policy, De Gruyter, vol. 19(3), pages 1-17, July.
    • Handle: RePEc:bpj:bejeap:v:19:y:2019:i:3:p:17:n:11
    DOI: 10.1515/bejeap-2018-0345
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    More about this item

    Keywords

    medical aid program; copayments; natural experiment; difference-in-differences; count data; quantile regressions; event study analysis;
    All these keywords.

    JEL classification:

    • I11 - Health, Education, and Welfare - - Health - - - Analysis of Health Care Markets
    • I18 - Health, Education, and Welfare - - Health - - - Government Policy; Regulation; Public Health
    • C60 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - General
    • C50 - Mathematical and Quantitative Methods - - Econometric Modeling - - - General

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