DP3021 Health Care Reform and the Number of Doctor Visits - An Econometric Analysis

Author(s): Rainer Winkelmann
Publication Date: October 2001
Keyword(s): co-payment, count data, moral hazard, probit-Poisson-log-normal model
JEL(s): C25, I11, I18
Programme Areas: Labour Economics, Public Economics
Link to this Page: www.cepr.org/active/publications/discussion_papers/dp.php?dpno=3021

The Paper evaluates the German health care reform of 1997, using the individual number of doctor visits as outcome measure. A new econometric model, the Probit-Poisson-log-normal model with correlated errors, describes the data better than existing count data models. Moreover, it has an attractive structural interpretation, as it allows the reforms to have a different effect at different parts of the distribution. The overall effect of the reform was a 10% reduction in the number of doctor visits. The effect was much larger in the lower part of the distribution than in the upper part.