Does Health Insurance Encourage the Rise in Medical Prices? A Test on Balance Billing in France.

Abstract:

:We evaluate the causal impact of an improvement in insurance coverage on patients' decisions to consult physicians who charge more than the regulated fee. We use a French panel data set of 43,111 individuals observed from 2010 to 2012. At the beginning of the period, none of them were covered for balance billing; by the end, 3819 had switched to supplementary insurance contracts that cover balance billing. Using instrumental variables to deal with possible non-exogeneity of the decision to switch, we find evidence that better coverage increases demand for specialists who charge high fees, thereby contributing to the rise in medical prices. People whose coverage improves increased their average amount of balance billing per consultation by 32%. However, the impact of the coverage shock depends on the supply of physicians. For people residing in areas where few specialists charge the regulated fee, better coverage increases not only prices but also the number of consultations, a finding that suggests that balance billing might limit access to care. Conversely, in areas where patients have a genuine choice between specialists who balance bill and those who do not, we find no evidence of a response to better coverage. Copyright © 2016 John Wiley & Sons, Ltd.

journal_name

Health Econ

journal_title

Health economics

authors

Dormont B,Péron M

doi

10.1002/hec.3347

subject

Has Abstract

pub_date

2016-09-01 00:00:00

pages

1073-89

issue

9

eissn

1057-9230

issn

1099-1050

journal_volume

25

pub_type

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