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Co‐payments for prescription drugs and the demand for doctor visits – Evidence from a natural experiment

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  • Rainer Winkelmann

Abstract

The German health care reform of 1997 provides a natural experiment for evaluating the price sensitivity of demand for physicians' services. As a part of the reform, co‐payments for prescription drugs were increased step up to 200%. However, certain groups of people were exempted from the increase, providing a natural control group against which the changed demand for physicians' services of the treated, those subject to increased co‐payments, can be assessed. The differences‐in‐differences estimates indicate that increased co‐payments reduced the number of doctor visits by about 10% on an average. Copyright © 2004 John Wiley & Sons, Ltd.

Suggested Citation

  • Rainer Winkelmann, 2004. "Co‐payments for prescription drugs and the demand for doctor visits – Evidence from a natural experiment," Health Economics, John Wiley & Sons, Ltd., vol. 13(11), pages 1081-1089, November.
    • Handle: RePEc:wly:hlthec:v:13:y:2004:i:11:p:1081-1089
    DOI: 10.1002/hec.868
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    References listed on IDEAS

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    1. Nina Pavcnik, 2002. "Do Pharmaceutical Prices Respond to Potential Patient Out-of-Pocket Expenses?," RAND Journal of Economics, The RAND Corporation, vol. 33(3), pages 469-487, Autumn.
    2. Marianne Bertrand & Esther Duflo & Sendhil Mullainathan, 2004. "How Much Should We Trust Differences-In-Differences Estimates?," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 119(1), pages 249-275.
    3. SOEP Group, 2001. "The German Socio-Economic Panel (GSOEP) after More than 15 Years: Overview," Vierteljahrshefte zur Wirtschaftsforschung / Quarterly Journal of Economic Research, DIW Berlin, German Institute for Economic Research, vol. 70(1), pages 7-14.
    4. Gourieroux, Christian & Monfort, Alain & Trognon, Alain, 1984. "Pseudo Maximum Likelihood Methods: Applications to Poisson Models," Econometrica, Econometric Society, vol. 52(3), pages 701-720, May.
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    More about this item

    JEL classification:

    • I11 - Health, Education, and Welfare - - Health - - - Analysis of Health Care Markets
    • I18 - Health, Education, and Welfare - - Health - - - Government Policy; Regulation; Public Health
    • C25 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Discrete Regression and Qualitative Choice Models; Discrete Regressors; Proportions; Probabilities

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