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Effects of Cost-sharing on Healthcare Utilization and Expenditure by the Elderly in Japan Open Access

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In order to extend the empirical evidence base with respect to the effects of a cost-sharing increase on healthcare utilization and expenditure, this study adopted the interrupted time-series design (ITS) with a longitudinal panel data set for a period of 40 years, which was constructed with various census-based surveys administered by the national government of Japan, and consisted of all of the 47 prefectures in Japan. With the fixed-effects model, this study was capable of controlling for heterogeneity of the prefectures. This study finds that the past policy reforms in Japan which increased cost-sharing for the elderly had significant negative impacts on utilization of inpatient and outpatient services by Japanese seniors. In particular, outpatient utilization reacted to the policy changes more sensitively than inpatient utilization. As to disparities in the effects between cost-sharing schemes, the 10% coinsurance had a more significant impact than copayment, particularly when the amount of copayment was nominal. A strong indication of the offset effects was observed: a long-term increase in hospital spending due to poor management of chronic conditions would have exceeded the previous short-term cost savings by the cost-sharing increases for outpatient services and medication. There is an urgent call for the Japanese government to develop a well-balanced policy between the demand and supply side addressing the financial sustainability of the universal health insurance system, which also facilitates better management of chronic conditions of the elderly. This research for the first time generated evidence of the effects of longitudinal increases in cost-sharing on the elderly in the context of the Japanese health care system. The study is expected to make a significant contribution to the current evidence base with its robust research methodology and the high representativeness of data, making a clear contrast with previous studies in Japan.

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