DP12507 Cost-Sharing Design Matters: A Comparison of the Rebate and Deductible in Healthcare

Author(s): Michiel Bijlsma, Jan Boone, Rudy Douven, Minke Remmerswaal
Publication Date: December 2017
Keyword(s): cost-sharing, deductible, healthcare consumption, panel data, rebate, regression discontinuity design
Programme Areas: Public Economics, Industrial Organization
Link to this Page: cepr.org/active/publications/discussion_papers/dp.php?dpno=12507

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.