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The effect of variable health insurance deductibles on the demand for physician visits
Author(s) -
Schellhorn Martin
Publication year - 2001
Publication title -
health economics
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.55
H-Index - 109
eISSN - 1099-1050
pISSN - 1057-9230
DOI - 10.1002/hec.630
Subject(s) - deductible , endogeneity , actuarial science , health insurance , incentive , business , instrumental variable , health care , order (exchange) , control (management) , generalized method of moments , economics , econometrics , microeconomics , finance , panel data , management , economic growth
In order to contain cost in the health care sector, the introduction of consumer incentives in health insurance has been suggested and realized in many countries. The Swiss health system reform of 1996 introduced a choice of deductible for health services in the mandatory basic health insurance. This paper estimates the effect of this choice on physician service utilization. A generalized method of moments (GMM) estimator is applied to take account of the endogeneity of the choice of the deductible in the estimation of the number of physician visits. This paper finds that most of the observed reduction in the number of physician visits among individuals who choose a higher deductible seems to be a result of self‐selection of individuals into the respective insurance contracts, and not to induced changes in utilization behaviour. Copyright © 2001 John Wiley & Sons, Ltd.