Discussion paper

DP17057 A structural microsimulation model for demand-side cost-sharing in healthcare

Demand-side cost-sharing schemes reduce moral hazard in healthcare at the expense of out-of-pocket risk. With a structural microsimulation model, we show that shifting the starting point of the deductible away from zero to 400 euros for all insured individuals, leads to an average 4% reduction in healthcare expenditure and 47% lower out-of-pocket payments for people without a chronic condition. We use administrative healthcare expenditure data for the Dutch population to analyze expenditure under different cost-sharing schemes. The model is estimated with a Bayesian mixture model to capture distributions of healthcare expenditure. This allows us to predict the effects of cost-sharing schemes that have not been used in the Netherlands.

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Citation

Boone, J and M Remmerswaal (eds) (2022), “DP17057 A structural microsimulation model for demand-side cost-sharing in healthcare”, CEPR Press Discussion Paper No. 17057. https://cepr.org/publications/dp17057