Working Paper: NBER ID: w31908
Authors: Giancarlo Buitrago; Javier Amayanieto; Grant Miller; Marcos Verahernndez
Abstract: There is substantial evidence that cost-sharing in medical care constrains total health spending. However, there is relatively little (and unclear) evidence on its health effects, particularly in low- and middle-income countries. This paper re-evaluates the link between outpatient cost-sharing and health, studying Colombia’s entire formal sector workforce observed monthly between 2011 and 2018 with individual-level health care utilization records linked to payroll data and vital statistics. Because Colombia’s national health system imposes discrete breaks in outpatient cost-sharing requirements across the earnings distribution, we estimate a dynamic regression discontinuity model, finding that greater outpatient cost-sharing initially reduces use of outpatient care (including consultations and drugs), resulting in fewer diagnoses of common chronic diseases – and over time, increases the prevalence and severity of chronic diseases as well as use of inpatient care. Ultimately, greater outpatient cost-sharing measurably increases mortality, raising 8-year mortality by 4 deaths per 10,000 individuals. To the best of our knowledge, this study is the first to show a relationship between cost-sharing and adult mortality risk in a low- or middle-income country, a relationship important to incorporate into social welfare analyses of cost-sharing policies.
Keywords: cost-sharing; adult mortality; Colombia; health care utilization; chronic diseases
JEL Codes: I10; I11; O15; O54
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| greater outpatient cost-sharing (I11) | reduced use of outpatient care (I11) |
| reduced use of outpatient care (I11) | fewer diagnoses of common chronic diseases (I12) |
| fewer diagnoses of common chronic diseases (I12) | increased prevalence and severity of chronic diseases over time (I12) |
| increased prevalence and severity of chronic diseases over time (I12) | increased mortality risk (I12) |
| greater outpatient cost-sharing (I11) | increased mortality risk (I12) |