Abstract
Establishing how to reform the cost-sharing policy to reduce waste in health-care utilisation is an important issue, especially in an ageing society. Using a generalised method of moments (GMM) for the dynamic panel count model during the period 1997–2007 from the National Health Insurance (NHI) programme in Taiwan, this study examines the effects of persistent behaviour and the cost-sharing policy on outpatient medical utilisation for Taiwan’s elderly. Empirically, we find positive and negative coefficient estimations for persistent behaviour and price elasticity, respectively, thereby creating a clear trade-off effect of the cost-sharing policy on health-care utilisation. Furthermore, our study finds that the short-run price elasticity (−0.2561) is always smaller than long-run elasticity (−0.4052). Finally, the empirical results indicate that the price elasticity for females and patients with high medical expenditure, low income, high chronic diseases and good health is higher than that for males and patients with low medical expenditure, high income, low chronic diseases and bad health.
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Notes
Nilsen et al. (2012).
Cunningham (2009).
Hirth et al. (2015).
Kohn and Liu (2013).
Ministry of Health and Welfare (2014).
Robyn et al. (2012).
Gardner et al. (2011).
Ngo (2014).
Manning et al. (1987).
Trottmann et al. (2012).
Curtis and MacMinn (2008).
National Health Insurance 2012–2013 Annual Report, edited by the Bureau of National Health Insurance.
Tian et al. (2012).
According to the report by the NHIRD, no significant difference was found in the distribution (χ 2 = 1.74, df = 1, p-value = 0.187) between the patients in our study and the original NHIRD (http://nhird.nhri.org.tw/en/index.htm).
Those NHI-defined chronic diseases include cancer (12), dysthyreosis (05), diabetes (01), Hyperlipidemia (19), Wilson’s Disease (48), gout (07) and disorders related to endocrine and metabolic systems (52, 70, 71, 80, 93). Detailed chronic diseases defined by the NHI can be found at the following website: http://www.nhi.gov.tw/webdata/webdata.aspx?menu=18&menu_id=703&webdata_id=1022.
The NHI data set records the patients’ monthly salary level to charge their monthly premiums.
(see Arellano and Bond (1991), for details).
Holtz-Eakin et al. (1988).
Windmeijer and Sliva (1997).
The days stayed in hospital each year is obtained by aggregating the days that the patient stayed in hospital each year and used to proxy catastrophic health events (e.g. cancer, heart attack), which may be related to regular follow-ups, resulting in higher medical utilisation following the care received for the illness (Kohn and Liu).
Musolesi and Nosvelli (2007).
The average outpatient utilisation for elderly Taiwanese is also greater than that for elderly Koreans (approximately 24.46 times) (Kim et al. (2005).
Some other count data models such as zero-inflated Poisson, binomial, and generic mixture models have been proposed to deal with dependent variables possessing an ‘excess’ of zeros relative to standard distributions.
The exchange rate of the Taiwanese dollar to the U.S. dollar is 30:1.
The average effective price is much smaller than that for elderly Koreans, which has a coinsurance rate of 54 per cent (Kim et al. (2005).
We also calculated the summary statistics of inpatient utilisations for the elderly. The average days spent in hospital by the elderly is 2.55 days, and the standard deviation of inpatient utilisation for the elderly is 10.79 days.
Liu and Wen (2010).
Musolesi and Nosvelli (2007) estimated the residential water demand function of Italian municipalities to calculate short-run and long-run price elasticities. Using a dynamic framework for a panel of Italian municipalities, the system GMM estimator shows that persistence of habits is coupled with high long-term price elasticity, which is higher than the one-year price elasticity.
Gaynor et al. (2007).
Yang et al. (2003).
In Taiwan’s NHI programme, even though patients have taken a chronic prescription, they are still asked to visit a doctor within 90 days (the longest period), thus allowing health-care providers to check the fee schedule and drug formulary and enabling doctors to discuss previous medical records with patients and make a proper decision based on the assessment of the patients’ health statuses.
Getzen (2000).
Sargan (1958).
NHI-defined catastrophic illnesses include malignant neoplasm of thyroid gland, Hereditary factor VIII and deficiency. A detailed list of catastrophic illnesses is available at the NHI’s official website.
Wu (2003).
Wu (2001).
Duarte (2012).
Our empirical results are almost completely different from Duarte (2012) findings, that is, high-income individuals are more price sensitive than low-income individuals in the Chilean private health insurance market.
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Yang, C.J., Tsai, Y.C. & Tien, J.J. The Impacts of Persistent Behaviour and Cost-Sharing Policy on Demand for Outpatient Visits by the Elderly: Evidence from Taiwan’s National Health Insurance. Geneva Pap Risk Insur Issues Pract 42, 31–52 (2017). https://doi.org/10.1057/s41288-016-0022-3
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DOI: https://doi.org/10.1057/s41288-016-0022-3