Effects of cost-sharing in health care.

Abstract

This article gives an introduction to the literature dealing with cost-sharing in health care and focuses on the question: does a change in cost-sharing have any impact on the demand for medical care, keeping all other things equal? And if so, to what degree? The main empirical results in the health care economics literature are reviewed and some important studies are discussed. One conclusion on which all studies agree is that an increase of the out-of-pocket price results in a reduction of the demand for the medical care in question. There are many indications that this money price-effect is the larger the lower the time-price, the lower the income, the less urgent the medical care is and the more influence the patient has on the decision to receive medical care. Finally, there are indications that cost-sharing for out-patient services reduces the hospitalization rate.