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A structural microsimulation model for demand-side cost-sharing in healthcare

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  • Boone, Jan
  • Remmerswaal, Minke

Abstract

Demand-side cost-sharing reduces moral hazard in healthcare but increases exposure to out-of-pocket expenditure. We introduce a structural microsimulation model to evaluate both total and out-of-pocket expenditure for different cost-sharing schemes. We use a Bayesian mixture model to capture the healthcare expenditure distributions across different age–gender categories. We estimate the model using Dutch data and simulate outcomes for a number of policies. The model suggests that for a deductible of 300 euros shifting the starting point of the deductible away from zero to 400 euros leads to an average 4% reduction in healthcare expenditure and 47% lower out-of-pocket payments.

Suggested Citation

  • Boone, Jan & Remmerswaal, Minke, 2024. "A structural microsimulation model for demand-side cost-sharing in healthcare," Journal of Health Economics, Elsevier, vol. 97(C).
  • Handle: RePEc:eee:jhecon:v:97:y:2024:i:c:s0167629624000456
    DOI: 10.1016/j.jhealeco.2024.102900
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