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Patient responsiveness to a differential deductible: empirical results from The Netherlands

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  • Stéphanie A. Geest

    (Erasmus University Rotterdam)

  • Marco Varkevisser

    (Erasmus University Rotterdam)

Abstract

Health insurers may use financial incentives to encourage their enrollees to choose preferred providers for medical treatment. Empirical evidence whether differences in cost-sharing rates across providers affects patient choice behavior is, especially from Europe, limited. This paper examines the effect of a differential deductible to steer patient provider choice in a Dutch regional market for varicose veins treatment. Using individual patients’ choice data and information about their out-of-pocket payments covering the year of the experiment and 1 year before, we estimate a conditional logit model that explicitly controls for pre-existing patient preferences. Our results suggest that in this natural experiment designating preferred providers and waiving the deductible for enrollees using these providers significantly influenced patient choice. The average cross-price elasticity of demand is found to be 0.02, indicating that patient responsiveness to the cost-sharing differential itself was low. Unlike fixed cost-sharing differences, the deductible exemption was conditional on the patient’s other medical expenses occurring in the policy year. The differential deductible did, therefore, not result in a financial benefit for patients with annual costs exceeding their total deductible.

Suggested Citation

  • Stéphanie A. Geest & Marco Varkevisser, 2019. "Patient responsiveness to a differential deductible: empirical results from The Netherlands," The European Journal of Health Economics, Springer;Deutsche Gesellschaft für Gesundheitsökonomie (DGGÖ), vol. 20(4), pages 513-524, June.
  • Handle: RePEc:spr:eujhec:v:20:y:2019:i:4:d:10.1007_s10198-018-1014-y
    DOI: 10.1007/s10198-018-1014-y
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    References listed on IDEAS

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    Cited by:

    1. Roos, Anne-Fleur & O’Donnell, Owen & Schut, Frederik T. & Van Doorslaer, Eddy & Van Gestel, Raf & Varkevisser, Marco, 2020. "Does price deregulation in a competitive hospital market damage quality?," Journal of Health Economics, Elsevier, vol. 72(C).

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    More about this item

    Keywords

    Patient channeling; Preferred providers; Tiered networks; Patient choice;
    All these keywords.

    JEL classification:

    • I11 - Health, Education, and Welfare - - Health - - - Analysis of Health Care Markets
    • I13 - Health, Education, and Welfare - - Health - - - Health Insurance, Public and Private
    • D12 - Microeconomics - - Household Behavior - - - Consumer Economics: Empirical Analysis
    • C25 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Discrete Regression and Qualitative Choice Models; Discrete Regressors; Proportions; Probabilities

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