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Research Article
HOW PRICE RESPONSIVE IS THE DEMAND FOR SPECIALTY CARE?
Article first published online: 14 JUL 2011
DOI: 10.1002/hec.1759
Published 2011. This article is a US Government work and is in the public domain in the USA.
Additional Information
How to Cite
Maciejewski, M. L., Liu, C.-F., Kavee, A. L. and Olsen, M. K. (2012), HOW PRICE RESPONSIVE IS THE DEMAND FOR SPECIALTY CARE?. Health Econ., 21: 902–912. doi: 10.1002/hec.1759
Publication History
- Issue published online: 2 JUL 2012
- Article first published online: 14 JUL 2011
- Manuscript Accepted: 26 APR 2011
- Manuscript Revised: 10 MAR 2011
- Manuscript Received: 4 MAR 2010
Funded by
- Office of Research and Development, Health Services Research and Development Service, Department of Veterans Affairs. Grant Numbers: IIR 03-200, RCS 10-391
- Abstract
- Article
- References
- Cited By
Keywords:
- costs;
- longitudinal;
- mixed model;
- random effects;
- health econometrics;
- zero-inflated data;
- specialty care;
- co-payment;
- cost sharing
SUMMARY
Objectives
Outpatient visit co-payments have increased in recent years. We estimate the patient response to a price change for specialty care, based on a co-payment increase from $15 to $50 per visit for veterans with hypertension.
Design, Setting, and Patients
A retrospective cohort of veterans required to pay co-payments was compared with veterans exempt from co-payments whose nonequivalence was reduced via propensity score matching. Specialty care expenditures in 2000–2003 were estimated via a two-part mixed model to account for the correlation of the use and level outcomes over time, and results from this correlated two-part model were compared with an uncorrelated two-part model and a correlated random intercept two-part mixed model.
Results
A $35 specialty visit co-payment increase had no impact on the likelihood of seeking specialty care but induced lower specialty expenditures over time among users who were required to pay co-payments. The log ratio of price responsiveness (semi-elasticity) for specialty care increased from −0.25 to −0.31 after the co-payment increase. Estimates were similar across the three models.
Conclusion
A significant increase in specialty visit co-payments reduced specialty expenditures among patients obtaining medications at the Veterans Affairs medical centers. Longitudinal expenditure analysis may be improved using recent advances in two-part model methods. Published 2011. This article is a US Government work and is in the public domain in the USA.