Differences in price elasticities of demand for health insurance: a systematic review

Abstract

Many health insurance systems apply managed competition principles to control costs and quality of health care. Besides other factors, managed competition relies on a sufficient price-elastic demand. This paper presents a systematic review of empirical studies on price elasticity of demand for health insurance. The objective was to identify the differing international ranges of price elasticity and to find socio-economic as well as setting-oriented factors that influence price elasticity. Relevant literature for the topic was identified through a two-step identification process including a systematic search in appropriate databases and further searches within the references of the results. A total of 45 studies from countries such as the USA, Germany, the Netherlands, and Switzerland were found. Clear differences in price elasticity by countries were identified. While empirical studies showed a range between -0.2 and -1.0 for optional primary health insurance in the US, higher price elasticities between -0.6 and -4.2 for Germany and around -2 for Switzerland were calculated for mandatory primary health insurance. Dutch studies found price elasticities below -0.5. In consideration of all relevant studies, age and poorer health status were identified to decrease price elasticity. Other socio-economic factors had an unclear impact or too limited evidence. Premium level, range of premiums, homogeneity of benefits/coverage and degree of forced decision were found to have a major influence on price elasticity in their settings. Further influence was found from supplementary insurance and premium-dependent employer contribution.

Premium Levels and Demand Response in Health Insurance: Relative Thinking and Zero-Price Effects

“…Thus, according to our model in section 2, relative thinking may result in a lower price sensitivity in the Netherlands. Although consumer health plan price sensitivity is difficult to compare across health systems, the available evidence indeed suggests that the price sensitivity in the Netherlands is lower than in Germany (Pendzialek et al 2016). …”

“…At a higher price level, consumers are poorer and should value a given price difference more, not less. 5 A large literature in health economics studies the price elasticity of demand for health insurance, for recent reviews, see McGuire (2012) and Pendzialek et al (2016).…”

Premium levels and demand response in health insurance: relative thinking and zero-price effects

“…At a higher price level, consumers are poorer and should value a given price difference more, not less. 5 A large literature in health economics studies the price elasticity of demand for health insurance, for recent reviews, seeMcGuire (2012) andPendzialek et al (2016).…”

Did adolescents in Norway respond to the elimination of copayments for general practitioner services?

“…This suggests that for this age group, prior to the reform, girls were more vulnerable than boys to copayments. There is limited research on gender differences in adolescents' response to copayments with which we can compare our findings; moreover, studies on this topic based on data for adults provide mixed evidence (Pendzialek, Simic, & Stock, ). Nevertheless, some studies report that adolescent girls have a greater need for confidential GP consultations, that is, without their parents' involvement (Edman, Adams, Park, & Irwin Jr, ; Klein, Wilson, McNulty, Kapphahn, & Scott Collins, ); thus, it could be that the copayment exemption had a greater effect among adolescent girls than boys partly because it encouraged confidential consultations with GPs.…”