The Short- and Long-Run Impact of Primary Care Insurance on Health Care Utilization, Spending and Health

• Applicant: Professor Dr. Nicolas Ziebarth
• Subject Area: Economic Policy, Applied Economics ; Empirical Social Research
• Term: since 2024
• Project identifier: Deutsche Forschungsgemeinschaft (DFG) - Project number 549468765

The question of how to design public health insurance and what benefits to include in essential benefit packages is of utmost importance to policymakers and the population. This is particularly true in countries where the majority of the population is publicly insured and the system is funded through payroll deductions, as in Germany. Demographic and technological change has raised health care spending faster than GDP, implying rising payroll taxes that crowd out disposable incomes and increase labor costs. Consequently, in regular intervals, policy debates suggest reducing essential benefit packages or increasing cost-sharing – two highly controversial measures. The controversy is largely due to the lack of empirical evidence on its consequences. For example, the introduction of copayments for outpatient care in Germany in 2004 was highly unpopular and its utilization and health effects were heatedly debated among health economists. Further, due to a lack of administrative data and sufficient variation, the longer-term consequences of reduced health plan generosity for health care utilization, spending and health remain ambiguous. In addition to studying the consequences of cost-sharing, that is, on the intensive margin, the recent refugee waves from Syria (and other countries) in 2015/2016 as well as the Ukraine (and other countries) in 2022/2023 have illustrated the relevance of studying health insurance consequences on the extensive margin, that is, the relevance of gaining health insurance. Similarly, for an optimal coverage of migrants, the consequences of gaps in insurance coverage are highly relevant. The main objective of this proposal is to empirically study the short-, medium, and long-run effects of health insurance – focused on primary care – on health care utilization, spending and diagnosed diseases as well as mortality. We will evaluate a unique natural experiment from 2002 in the United States. The state of Utah enrolled formerly uninsured individuals in health plans that emphasized primary care and restricted more expensive specialist care. Comparing enrollees in these plans with both (a) uninsured and (b) enrollees in standard plans with more generous specialist coverage, we will trace out the effects of primary care on health care use, health care spending and health. To do so, we will use various unique longitudinal claims datasets from Utah. The pre-reform period covers up to six years of the universe of inpatient discharge data and all ambulatory surgeries as well as emergency room (ER) visits. The post-reform period includes up to 18 years of each of these inpatient, outpatient, and emergency care datasets. Importantly, we can also rely on all-payer claims data from 2013 to 2015. These data provide information on every single Utahn resident and allow us to estimate the impact of a 2002 reform on their entire medical care use in the short-, medium and long-run.

• DFG Programme: Research Grants
• International Connection: USA
• Cooperation Partner: Professor Kurt Lavetti, Ph.D.