Does High Cost-Sharing Slow the Long-term Growth Rate of Health Spending? Evidence from the States / Molly Frean, Mark Pauly.

Format:

Book

Author/Creator:

Frean, Molly.

Contributor:

National Bureau of Economic Research.

Pauly, Mark.

Series:

Working Paper Series (National Bureau of Economic Research) no. w25156.

NBER working paper series no. w25156

Language:

English

Physical Description:

1 online resource: illustrations (black and white);

Place of Publication:

Cambridge, Mass. National Bureau of Economic Research 2018.

Summary:

Research has shown that higher cost-sharing lowers health care spending levels but less is known about whether cost-sharing also affects spending growth. From 2002 to 2016, private insurance deductibles more than tripled in magnitude. We use data from the Centers for Medicare and Medicaid Services and the Agency for Healthcare Research and Quality to estimate whether areas with relatively higher deductibles experienced lower spending growth during this period. We leverage panel variation in private deductibles across states and over time and address the potential endogeneity of deductibles using instrumental variables. We find that spending growth is significantly lower in states with higher average deductibles and observe this relationship with regard to both private insurance benefits and total spending (including Medicare and Medicaid), suggestive of potential spillovers. We hypothesize that the impact on spending growth happens because deductibles affect the diffusion of costly new technology.

Notes:

Print version record

October 2018.