This paper estimates the price elasticity of healthcare utilization in early childhood. We employ a regression discontinuity design by exploiting a subsidy that reduces patient cost-sharing for children under age 3 in Taiwan. Using longitudinal medical claims of over 410,000 children, we find a modest price elasticity of outpatient expenditure (e.g., −0.10 for regular outpatient care). Furthermore, increased cost-sharing at age 3 largely decreases the chance of visiting high-intensity healthcare providers (e.g., teaching hospitals) for minor illnesses. In contrast, children's utilization of inpatient care is price insensitive, providing a rationale for full inpatient care coverage to children.
Han, Hsing-Wen, Hsien-Ming Lien, and Tzu-Ting Yang.
"Patient Cost-Sharing and Healthcare Utilization in Early Childhood: Evidence from a Regression Discontinuity Design."
American Economic Journal: Economic Policy,
National Government Expenditures and Health
Analysis of Health Care Markets
Health Insurance, Public and Private
Health: Government Policy; Regulation; Public Health
Fertility; Family Planning; Child Care; Children; Youth