Browsing by Subject "healthcare demand"

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    The Price is Right: Examining Demand for Medical Care in the Presence of Deductibles
    (2015-12) Trenz, Yelena
    Research in health economics has traditionally considered only the current price of care in the estimations of demand for medical services. However, given the typical structure of insurance contracts that include cost-sharing features such as deductibles, the price of medical care is not constant throughout the year and depends on past and future medical expenditures. This study explicitly incorporates this nonlinearity by using the more appropriate concept of expected end-of-year price and applying it to the analysis of the demand for medical care by a sample of insured pregnant women who face different end-of-year prices depending on the timing of labor. Additionally, it investigates whether this group of consumers is myopic or forward-looking by examining which price, current or expected end-of-year, women use when making purchasing decisions. The results show that women who give birth in a calendar year face lower expected end-of-year prices, but combined with other health factors, use less non-pregnancy related medical care than those who do not give birth within the same period. The findings point to the presence of forward-looking behavior, while not fully rejecting myopia. Additionally, when the probability of reaching the deductible is used as the price-changing event, rather than labor, there is more evidence of forward-looking behavior among women in the sample, as those who reach the deductible spend more on medical care in response to the lower end-of-year price.