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 and equity. 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 percent reduction in healthcare expenditure and 47 percent lower out of pocket payments. We use administrative healthcare expenditure data and focus on the price elastic part of the Dutch population to analyze the differences between the cost sharing schemes. The model is estimated with a Bayesian mixture model to capture distributions of healthcare expenditure with which we predict the effects of cost sharing schemes that are not present in our data. DOI: https:/doi.org/10.34932/2dcx 9103