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How Price Responsive Is The Demand For Specialty Care?

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  • Matthew L. Maciejewski
  • Chuan‐Fen Liu
  • Andrew L. Kavee
  • Maren K. Olsen

Abstract

Objectives Outpatient visit co‐payments have increased in recent years. We estimate the patient response to a price change for specialty care, based on a co‐payment increase from $15 to $50 per visit for veterans with hypertension. Design, Setting, and Patients A retrospective cohort of veterans required to pay co‐payments was compared with veterans exempt from co‐payments whose nonequivalence was reduced via propensity score matching. Specialty care expenditures in 2000–2003 were estimated via a two‐part mixed model to account for the correlation of the use and level outcomes over time, and results from this correlated two‐part model were compared with an uncorrelated two‐part model and a correlated random intercept two‐part mixed model. Results A $35 specialty visit co‐payment increase had no impact on the likelihood of seeking specialty care but induced lower specialty expenditures over time among users who were required to pay co‐payments. The log ratio of price responsiveness (semi‐elasticity) for specialty care increased from −0.25 to −0.31 after the co‐payment increase. Estimates were similar across the three models. Conclusion A significant increase in specialty visit co‐payments reduced specialty expenditures among patients obtaining medications at the Veterans Affairs medical centers. Longitudinal expenditure analysis may be improved using recent advances in two‐part model methods. Published 2011. This article is a US Government work and is in the public domain in the USA.

Suggested Citation

  • Matthew L. Maciejewski & Chuan‐Fen Liu & Andrew L. Kavee & Maren K. Olsen, 2012. "How Price Responsive Is The Demand For Specialty Care?," Health Economics, John Wiley & Sons, Ltd., vol. 21(8), pages 902-912, August.
    • Handle: RePEc:wly:hlthec:v:21:y:2012:i:8:p:902-912
    DOI: 10.1002/hec.1759
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    References listed on IDEAS

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