| Abstract |
This paper estimates causal effects of an increase in patient cost sharing on healthcare utilization and on health over the medium-term (around 2-4 years). Specifically, we focus on the increase in coinsurance rates, from 10% to 20%, for those between the ages of 70-74, born after April 1944 in Japan. We use a regression discontinuity design that takes birth month and year as the running variable. We find that this increase in cost sharing slightly reduced healthcare utilization without discernible impacts on health, as measured by mortality and self-assessed health, up to 4 years later. The estimated elasticity of utilization with respect to its out-of-pocket price is 0.05-0.07 in absolute value. The results imply that, while full evaluations on benefits are needed, an increase in cost sharing could be a policy option to reduce healthcare spending. Also, its effect to reduce healthcare spending may be smaller than indicated by the “gold standard” of the RAND estimate, 0.2. |