Sunday, January 5, 2014

More evidence that low-deductible health insurance has negligible health benefits

My research design exploits a sharp reduction in cost sharing for patients aged over 70 in Japan, to examine its effect on utilization, patient health, and financial protection against risk. Due to the prevailing national policy, cost sharing for outpatient visits and inpatient admissions is as much as 60-80 percent lower at age 70 than at age 69 in Japan. ... By exploiting this price variation, I compare the outcomes of patients just below 70 versus those just over that age using a regression discontinuity (RD) design. ...

First, I find that reduced cost sharing at age 70 discontinuously increases health care utilization. The corresponding elasticity is modest, at around -0.2 for both outpatient visits and inpatient admissions. ...

Second, in terms of benefits, I do not find that lower patient cost sharing improves any of the health measures I examine, such as mortality and self-reported physical and mental health. Since health is a stock, it may take some time for the most observable health effects to be realized. Therefore, it is challenging to address it using the RD approach unless the causes of death are acute. Nonetheless, I do not find any change even in acute cause-specific mortality.
--Hitoshi Shigeoka, "The Effect of Patient Cost Sharing on Utilization, Health, and Risk Protection," on evidence outside of the RAND Health Insurance Experiment and the Oregon Medicaid lottery