Lötscher-Töngi, Fabienne (2024). Essays in Health Economics. (Thesis). Universität Bern, Bern
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Abstract
Designing effective policies to improve efficiency in health care markets while ensuring public health is challenging. Most policies aim to incentivize certain desired behaviors among various actors in the health care market. However, policies often have unintended consequences, as different individuals and firms might react differently to the same policy. Therefore, the analysis of (i) responses to past policy changes, (ii) the identification of potentially misaligned incentives in the current system, and (iii) the elicitation of preferences to predict responses to potential future policies reveal important information for optimal policy design. In this thesis, I focus on policy design in the health care sector. Health care markets and health policy offer an excellent laboratory to study the effectiveness of past, current and potential future policies for two reasons. First, health care markets are highly regulated. Second, in the light of increasing health care costs among most developed countries, it is essential to develop effective policies to contain health care expenditure while avoiding possible adverse effects on public health. This thesis studies how individuals and firms react to policy reforms and the incentives generated by existing policy structures. The first two articles focus on optimal health plan design in health insurance and use detailed claims-level health insurance data. The third article concentrates on the creation of effective policies to deter individuals from engaging in behaviors detrimental to their health. This third analysis is based on data retrieved from a discrete choice experiment. In the first article of this thesis, I analyse jointly with Michael Gerfin and Christian Schmid how higher out-of-pocket payments for expensive drugs affect pharmaceutical firms’ pricing behavior and patients’ drug demand. To do so, we study the effects of a policy change in Switzerland in 2011, which introduced a higher coinsurance rate of 20% (instead of the regular 10%) for substitutable prescription drugs with a price above a predefined threshold. We find that firms considerably reduced their prices to avoid higher coinsurance on their products. Whereas generic producers reduced the prices for 84% of their affected products, brand-name producers were much more reluctant to lower prices. To estimate the demand response of the policy, we exploit the delayed implementation of the policy by one Swiss health insurer in a differences-in-differences framework. Our results suggest that patients slightly reduced their demand for products subject to higher coinsurance. Without the anticipatory behavior of firms, however, the demand response would likely have been more pronounced, emphasizing the importance of the interplay of different actors in the health care market. Furthermore, the heterogeneity in price responses was mirrored in the demand responses. While higher out-of-pocket payments hardly reduced the probability of purchasing affected brand-name drugs, the demand response was more pronounced for generics with higher coinsurance. In summary, our findings suggest that (re)establishing market-like mechanism such as price signals can be effective in enhancing health care market efficiency. Consequently, our results provide valuable information for designing effective cost-sharing structures in health care. In the second article, I study, together with my coauthors Caroline Chuard and Christian Schmid, whether individuals are forward-looking in their health care consumption, taking into account future price changes. For this purpose, we use a natural experiment. We exploit the exogenous increase in cost-sharing for individuals upon reaching adulthood in Switzerland. Our results provide suggestive evidence that individuals increase their health care consumption anticipating future out-of-pocket price increases. Exploratory analyses further indicate that the higher health care demand in the last year with lower out-of-pocket prices is more likely extra demand than demand shifting across periods. Our findings have important policy implications, revealing that individuals react to misaligned dynamic incentives created by a discontinuous change in the out-of-pocket price around the turn of the year. Therefore, our findings may guide policymakers in adjusting annual deductible structures to enhance cost-sharing effectiveness. In the last article, I assess jointly with my coauthors Anna Nicolet, Catherine Maclean, Joachim Marti, and Michael Pesko, the effectiveness of various proposed tobacco market policies in reducing smokers’ consumption of health-harming tobacco products. Specifically, we study preference heterogeneity across different types of smokers and elaborate on its significance for optimal policy design. Our findings indicate that there is considerable heterogeneity in preferences for the various tobacco and smoking cessation products considered, leading to different responses of distinct smoker types towards proposed tobacco policies. While more than 50% of smokers have a strong preference for cigarettes and hardly react to any policy, two subgroups of smokers seem more sensitive to tobacco policies. Our analyses further suggest that, for several policies, there is a trade-off between the policy’s health benefits for one subgroup of smokers and unintended consequences for another subgroup of smokers. Hence, considering this heterogeneity and understanding the underlying drivers thereof, is crucial for the design of effective tobacco market regulations.
| Item Type: | Thesis |
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| Dissertation Type: | Cumulative |
| Date of Defense: | 31 October 2024 |
| Subjects: | 300 Social sciences, sociology & anthropology > 330 Economics 600 Technology > 610 Medicine & health |
| Institute / Center: | 03 Faculty of Business, Economics and Social Sciences > Department of Economics > Institute of Economics |
| Depositing User: | Hammer Igor |
| Date Deposited: | 11 Sep 2025 14:14 |
| Last Modified: | 23 Sep 2025 14:27 |
| URI: | https://boristheses.unibe.ch/id/eprint/6679 |
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