Intertemporal substitution in health care demand: Evidence from the RAND Health Insurance Experiment

• 成果类型: Article
• 署名作者: Lin, Haizhen; Sacks, Daniel W.
• 署名单位: Indiana University System; IU Kelley School of Business; Indiana University Bloomington; National Bureau of Economic Research
• 刊物名称: JOURNAL OF PUBLIC ECONOMICS
• ISSN/ISSBN: 0047-2727
• DOI: 10.1016/j.jpubeco.2019.04.006
• 发表日期: 2019
• 页码: 29-43
• 关键词: Health insurance; intertemporal substitution; moral hazard; Dynamic incentives

摘要

Nonlinear cost-sharing in health insurance encourages intertemporal substitution because patients can reduce their out-of-pocket costs by concentrating spending in years when they hit the deductible. We develop a test for intertemporal substitution and apply it to data from the RAND Health Insurance Experiment, where people were randomly assigned either to a free care plan or to a cost-sharing plan which had coinsurance up to a maximum dollar expenditure (MDE). Hitting the MDE-leading to an effective price of zero-has a bigger effect on health care demand than does being in free care, because people who hit the MDE face low current prices but high future prices, and so stock up on health care. As a result, short-lasting price changes induce nearly twice as big a response as do long-lasting changes. These findings help reconcile disparate estimates of the price elasticity of demand for health care in the existing literature. Failing to account for intertemporal substitution can lead researchers to overstate cost savings from high deductible health plans by 20% or more. (C) 2019 Elsevier B.V. All rights reserved.