Is Preventive Care Worth the Cost? Evidence from Mandatory Checkups in Japan
Using unique individual-level panel data, we investigate whether preventive medical care triggered by health checkups is worth the cost. We exploit the fact that biomarkers just below and above a threshold may be viewed as random. We find that people respond to health signals and increase physician visits. However, we find no evidence that additional care is cost effective. For the “borderline type” (“pre-diabetes”) threshold for diabetes, medical care utilization increases but neither physical measures nor predicted risks of mortality or serious complications improve. For efficient use of medical resources, cost effectiveness of preventive care must be carefully examined.
We are grateful to Hyuncheol Kim and seminar participants at the 2016 EuHEA conference in Hamburg for helpful comments and suggestions. Financial support from the Kikawada Foundation is gratefully acknowledged. All remaining errors are our own. The authors declare that they have no relevant or material financial interests that relate to the research described in this paper. The study of which this research was a part was reviewed and approved by the Stanford University IRB. The views expressed herein are those of the authors and do not necessarily reflect the views of the National Bureau of Economic Research.
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