Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/216420 
Year of Publication: 
2020
Series/Report no.: 
IZA Discussion Papers No. 13108
Publisher: 
Institute of Labor Economics (IZA), Bonn
Abstract: 
We develop a new approach to quantify how patients respond to dynamic incentives in health insurance contracts with a deductible. Our approach exploits two sources of variation in a differences-in-regression-discontinuities design: deductible contracts reset at the beginning of the year, and cost-sharing limits change over the years. Using rich claims-level data from a large Dutch health insurer we find that individuals are forward-looking. Changing dynamic incentives by increasing the deductible by €100 leads to a reduction in healthcare spending of around 3% on the first days of the year and 6% at the annual level. The response to dynamic incentives is an important part of the overall effect of cost-sharing schemes on healthcare expendituresâ€"much more so than what the previous literature has suggested.
Subjects: 
health insurance
patient cost-sharing
dynamic incentives
JEL: 
I13
H51
Document Type: 
Working Paper

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