C. Van De Voorde et al., Effects of cost sharing on physician utilization under favourable conditions for supplier-induced demand, HEALTH ECON, 10(5), 2001, pp. 457-471
The effects of cost sharing on the demand for ambulatory care in experiment
al circumstances are well understood since the Rand Health Insurance Experi
ment (HIE). However, in a non-experimental real-world context, supplier-ind
uced demand of doctors might erode some of the significant negative out-of-
pocket price elasticity identified in the HIE. Belgium is an interesting te
st case for this hypothesis because it has relatively high rates of patient
cost sharing in its public health insurance system and a very high density
of physicians, all remunerated fee-for-service. We have exploited the pric
e variation generated by a substantial increase in patient co-payment rates
in 1994 to estimate out-of-pocket price elasticities for three groups of u
sers, and for three types of services using a fixed-effects model in levels
and in differences. We obtain significant out-of-pocket price elasticities
for the general population in the range from - 0.39 to - 0.28 for GP home
visits, - 0.16 to - 0.12 for GP office visits and - 0.10 for specialist vis
its. The estimates were generally lower and less significant for the groups
of elderly and disabled. The differences we find in price responsiveness a
ppear to be fairly robust and consistent with the HIE predictions. These re
sults suggest that-at least in the short run-non-experimental utilization e
ffects of cost sharing are very similar to the experimental evidence, even
in a situation of favourable conditions for supplier-induced demand. Copyri
ght (C) 2001 John Wiley & Sons, Ltd.