Working Paper: CEPR ID: DP17057
Authors: Jan Boone; Minke Remmerswaal
Abstract: Demand-side cost-sharing schemes reduce moral hazard in healthcare at the expense of out-of-pocket risk. With a structural microsimulation model, we show that shifting the starting point of the deductible away from zero to 400 euros for all insured individuals, leads to an average 4% reduction in healthcare expenditure and 47% lower out-of-pocket payments for people without a chronic condition. We use administrative healthcare expenditure data for the Dutch population to analyze expenditure under different cost-sharing schemes. The model is estimated with a Bayesian mixture model to capture distributions of healthcare expenditure. This allows us to predict the effects of cost-sharing schemes that have not been used in the Netherlands.
Keywords: Moral Hazard; Risk; Equity; Out-of-Pocket; Shifted Deductible; Coinsurance; Bayesian Mixture Model; Microsimulation Model
JEL Codes: I18; D61
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| shifting the starting point of the deductible from zero to 400 euros (H23) | average 4% reduction in healthcare expenditure (H51) |
| shifting the starting point of the deductible from zero to 400 euros (H23) | 47% decrease in out-of-pocket payments for individuals without chronic conditions (G52) |
| higher deductibles (G52) | lower healthcare expenditures (H51) |
| deductible levels (G22) | healthcare expenditure (H51) |
| deductible levels (G22) | out-of-pocket payments (D14) |