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Tiered cost sharing and health care demand.
- Source :
-
Journal of Health Economics . Sep2022, Vol. 85, pN.PAG-N.PAG. 1p. - Publication Year :
- 2022
-
Abstract
- In this paper, I study tiered cost sharing, an innovative incentive structure designed to steer patients toward low-cost providers using large out-of-pocket price differentials. Using administrative data from New Hampshire, where two large insurers utilize tiered pricing programs, I estimate the effects of tiering on choices and spending for common gastrointestinal endoscopic procedures. I first conduct a difference-in-differences analysis using the rollout of one insurer's tiered option. I then develop and estimate a demand model to explicitly compare the tiered design with other common plans. Both the reduced form and structural models imply that the tiered plans are associated with 4.5%-6.3% less in mean per-episode spending than high-deductible and coinsurance-based plans, and do not affect the likelihood of seeking care. I find evidence that the savings is in part due to a salience or "simple pricing" effect whereby patients respond to tiered out-of-pocket prices but not to traditional deductibles or coinsurance rates. [ABSTRACT FROM AUTHOR]
- Subjects :
- *INSURANCE companies
*MEDICAL care costs
*MEDICAL care
*INSURANCE
Subjects
Details
- Language :
- English
- ISSN :
- 01676296
- Volume :
- 85
- Database :
- Academic Search Index
- Journal :
- Journal of Health Economics
- Publication Type :
- Academic Journal
- Accession number :
- 159031505
- Full Text :
- https://doi.org/10.1016/j.jhealeco.2022.102663