Abstract
Health insurers may use financial incentives to encourage their enrollees to choose preferred providers for medical treatment. Empirical evidence whether differences in cost-sharing rates across providers affects patient choice behavior is, especially from Europe, limited. This paper examines the effect of a differential deductible to steer patient provider choice in a Dutch regional market for varicose veins treatment. Using individual patients’ choice data and information about their out-of-pocket payments covering the year of the experiment and 1 year before, we estimate a conditional logit model that explicitly controls for pre-existing patient preferences. Our results suggest that in this natural experiment designating preferred providers and waiving the deductible for enrollees using these providers significantly influenced patient choice. The average cross-price elasticity of demand is found to be 0.02, indicating that patient responsiveness to the cost-sharing differential itself was low. Unlike fixed cost-sharing differences, the deductible exemption was conditional on the patient’s other medical expenses occurring in the policy year. The differential deductible did, therefore, not result in a financial benefit for patients with annual costs exceeding their total deductible.
Highlights
Managed care insurers that are more successful at channeling patients can negotiate better deals with health care providers [7, 19, 26]
To estimate our model we use pooled individual patient choice data from 1 year before (2008) and during the channeling experiment (2009). This allows us to control for unobservable prior preferences for providers that were designated as preferred provider by the insurer in 2009, as it is very unlikely that patient preferences changed simultaneously with the introduction of the patient channeling experiment in these two consecutive years
This paper examined a Dutch insurer’s channeling experiment with a differential deductible to steer patient provider choice in a regional market for varicose veins treatment
Summary
Managed care insurers that are more successful at channeling patients can negotiate better deals with health care providers [7, 19, 26]. There is emerging empirical evidence from the US that the use of financial incentives affects patient choice behavior (see for example [5, 16, 18]). This paper examines a channeling experiment with a differential deductible in The Netherlands In this 1-year experiment De Friesland Zorgverzekeraar (DFZ), at that time the largest independent regional health insurer in The Netherlands, designated preferred providers for two procedures (cataract surgery and varicose veins treatment). People still had to pay their annual deductible when using other medical services than cataract surgery and varicose veins treatment. Consumers obtain a community-rated discount on their premium if they opt for a voluntary deductible (at most 500 euro)
Sign-in/Register to view highlights & summary Talk to us
Join us for a 30 min session where you can share your feedback and ask us any queries you have
Schedule a callDisclaimer: All third-party content on this website/platform is and will remain the property of their respective owners and is provided on "as is" basis without any warranties, express or implied. Use of third-party content does not indicate any affiliation, sponsorship with or endorsement by them. Any references to third-party content is to identify the corresponding services and shall be considered fair use under The CopyrightLaw.
