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

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Frean, Molly

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Material type: Text

TextSeries: Working Paper Series (National Bureau of Economic Research) ; no. w25156.Publication details: Cambridge, Mass. National Bureau of Economic Research 2018.Description: 1 online resource: illustrations (black and white)Subject(s):

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Abstract: 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.

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Item type	Home library	Collection	Call number	Status	Date due	Barcode	Item holds
Working Paper	Biblioteca Digital	Colección NBER	nber w25156 (Browse shelf(Opens below))	Not For Loan

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October 2018.

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.