NATIONAL BUREAU OF ECONOMIC RESEARCH
NATIONAL BUREAU OF ECONOMIC RESEARCH

The Effect of Patient Cost Sharing on Utilization, Health, and Risk Protection

Hitoshi Shigeoka

NBER Working Paper No. 19726
Issued in December 2013
NBER Program(s):   HC

This paper exploits a sharp reduction in patient cost sharing at age 70 in Japan, using a regression discontinuity design to examine its effect on utilization, health, and financial risk arising from out-of-pocket expenditures. Due to the national policy, cost sharing is 60-80 percent lower at age 70 than at age 69. I find that both outpatient and inpatient care are price sensitive among the elderly. While I find little impact on mortality and other health outcomes, the results show that reduced cost sharing is associated with lower out-of-pocket expenditures, especially at the right tail of the distribution.

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Acknowledgments

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Forthcoming as The Effect of Patient Cost Sharing on Utilization, Health, and Risk Protection, Hitoshi Shigeoka, in Measuring and Modeling Health Care Costs (2014), University of Chicago Press

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