Abstract
This paper considers the demand for health care more comprehensively, by separating analysis of decision making on whether one should contact a physician or not, and analysis of choice of what kind of contact (outpatient, inpatient after outpatient service and inpatient) one should take.
We use pooled individual medical claim data with permission of three mutual health insurance associations. By aggregating the medical claim data by episode, we focus on empirical analysis of both how the "first contact" with a physician was affected by the rise of the co-insurance rate in September 1997, and what type of contact (outpatient, inpatient after outpatient service and inpatient) was chosen.
Our results show that the rise of the co-insurance rate in September 1997 (1) decreased probability of "first contact", but (2) had no effect on choice of contact type. These results indicate that the rise of the co-insurance rate decreases the demand for health care, but they do not indicate with statistical significance the worsening of health due to the rise of the co-insurance rate.
In our analysis, we compared the results by the simple use of dummy variables and the use of the difference in difference method. They give us relatively similar results when the data has a longer time horizon.
