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What to expect when you are expecting: Are health care consumers forward-looking?
| Content Provider | Semantic Scholar |
|---|---|
| Author | Guo, Audrey Zhang, Jonathan Z. |
| Copyright Year | 2019 |
| Abstract | A fundamental question in health insurance markets is how do health care consumers dynamically optimize their medical utilization under non-linear insurance contracts? Our paper tests the neoclassical prediction that a fully forward-looking agent only responds to their expected end-of-year price. Our unique identification strategy studies families during the year of childbirth who will likely satisfy their annual deductible, thereby knowing their expected end-of-year price. We find that during the year of a childbirth, fathers increase medical spending by 11% per month after their deductible is satisfied, rejecting the null of fully forward-looking consumers. This behavior cannot be explained by fathers increasing utilization in response to the childbirth itself. Furthermore, this myopia translates to a 21-24% decrease in total annual medical spending, relative to the counterfactual of fully forward-looking behavior, and is concentrated in elective procedures; we find no response in low value or urgent care. Our findings suggest the need for modeling non-linear incentives while accounting for myopic behavior when studying the medical utilization responses to health insurance. |
| Starting Page | 102216 |
| Ending Page | 102216 |
| Page Count | 1 |
| File Format | PDF HTM / HTML |
| DOI | 10.1016/j.jhealeco.2019.06.003 |
| PubMed reference number | 31362142 |
| Journal | Medline |
| Volume Number | 67 |
| Alternate Webpage(s) | https://web.stanford.edu/~jzhang7/deductible.pdf |
| Alternate Webpage(s) | https://doi.org/10.1016/j.jhealeco.2019.06.003 |
| Journal | Journal of health economics |
| Language | English |
| Access Restriction | Open |
| Content Type | Text |
| Resource Type | Article |
