Cost sharing in health service provision: an empirical assessment of cost savings

Martin Chalkley, James M. Malcolmson

    Research output: Contribution to journalArticle

    25 Citations (Scopus)

    Abstract

    Fixed price payments for treatment of patients with a specified diagnosis are widespread in both US Medicare and the British NHS even though there are substantial variations in the cost of treatment. Theory suggests that, when there is asymmetric information about those costs, total payment can be reduced by cost sharing. This paper uses data from Medicare to assess the cost savings that might be feasible in practice from cost sharing. For diagnosis related groups with low cost variation, the calculated cost savings are approximately 7%. For those with high cost variation, the calculated cost savings are more than 60%
    Original languageEnglish
    Pages (from-to)219-249
    Number of pages31
    JournalJournal of Public Economics
    Volume84
    Issue number2
    DOIs
    Publication statusPublished - 2002

    Keywords

    • Health services
    • Medicare
    • Cost sharing

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