Health insurers may use financial incentives to encourage their enrollees to choose preferred providers for medical treatment. Empirical evidence whether differences in cost-sharing rates across providers affects patient choice behavior is, especially from Europe, limited. This paper examines the effect of a differential deductible to steer patient provider choice in a Dutch regional market for varicose veins treatment. Using individual patients’ choice data and information about their out-of-pocket payments covering the year of the experiment and 1 year before, we estimate a conditional logit model that explicitly controls for pre-existing patient preferences. Our results suggest that in this natural experiment designating preferred providers and waiving the deductible for enrollees using these providers significantly influenced patient choice. The average cross-price elasticity of demand is found to be 0.02, indicating that patient responsiveness to the cost-sharing differential itself was low. Unlike fixed cost-sharing differences, the deductible exemption was conditional on the patient’s other medical expenses occurring in the policy year. The differential deductible did, therefore, not result in a financial benefit for patients with annual costs exceeding their total deductible.

Patient channeling · Preferred providers · Tiered networks · Patient choice
Analysis of Health Care Markets (jel I11), Health Insurance, Public and Private (jel I13), Consumer Economics: Empirical Analysis (jel D12), Discrete Regression and Qualitative Choice Models; Discrete Regressors (jel C25),
European Journal of Health Economics (HEPAC)
Health Systems and Insurance

van der Geest, S.A, & Varkevisser, M. (2018). Patient responsiveness to a differential deductible: empirical results from The Netherlands. European Journal of Health Economics (HEPAC). doi:10.1007/s10198-018-1014-y