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Title: Cost-Sharing Design Matters: A Comparison of the Rebate and Deductible in Healthcare

Author(s): Michiel Bijlsma, Jan Boone, Rudy Douven and Minke Remmerswaal

Publication Date: December 2017

Keyword(s): cost-sharing, deductible, healthcare consumption, panel data, rebate and regression discontinuity design

Programme Area(s): Industrial Organization and Public Economics

Abstract: Since 2006, the Dutch population has faced two different cost-sharing schemes in health insurance for curative care: a mandatory rebate of 255 euros in 2006 and 2007, and since 2008 a mandatory deductible. Using administrative data for the entire Dutch population, we compare the effect of both cost-sharing schemes on healthcare consumption between 2006 and 2013. We use a regression discontinuity design which exploits the fact that persons younger than eighteen years old neither face a rebate nor a deductible. Our fixed effect estimate shows that for individuals around the age of eighteen, a one euro increase of the deductible reduces healthcare expenditures 18 eurocents more than a euro increase of the rebate. These results demonstrate that differences in the design of a cost-sharing scheme can lead to substantial different effects on total healthcare expenditure.

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Bibliographic Reference

Bijlsma, M, Boone, J, Douven, R and Remmerswaal, M. 2017. 'Cost-Sharing Design Matters: A Comparison of the Rebate and Deductible in Healthcare'. London, Centre for Economic Policy Research. https://cepr.org/active/publications/discussion_papers/dp.php?dpno=12507