Title: Price Elasticity of Demand for Medical Care: The Evidence since the RAND Health Insurance Experiment
Abstract: The estimates of elasticity of demand for medical services provided by the RAND Health Insurance Experiment (HIE) of the 1970s have largely served as the gold standard for our understanding of how cost-sharing affects patient decisions to consume medical care. Owing to evolution in benefit design and a desire to test the generalizability of the HIE estimates, several studies of demand response to aspects of medical care have been conducted since the HIE. Demand response for pharmaceuticals is found to be slightly more responsive and associated with decreased utilization of other medical services, which suggests that pharmaceuticals and other medical services are substitutes. Evidence also suggests that supply-side mechanisms may limit the generalizability of the RAND estimates of demand response.
Publication Year: 2014
Publication Date: 2014-01-01
Language: en
Type: book-chapter
Indexed In: ['crossref']
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