EFFECTS OF COST SHARING ON PHYSICIAN UTILIZATION 459 ly covers the co- GP visits were delivered at the patients home in ts for hospitalizations, not for outpatient 1994 [6]. But the level and mix of consultation ecently, such private supplementary cover rates also differ substantially by socio-economic has begun to include pre-and post-hospitalization group, as we will see in Section 4 below costs as well, but this type of policy was still very rare in 1994 The Belgian health insurance system has been EVIDENCE ON PRICE SENSITIVITY OF making use of public sector cost sharing for HEALTH CARE DEMAND decades, but in the early 1990s, user charges for GP and specialist services were raised substan tially in real terms for the general non-exempt In the literature, the effects of cost sharing now well un sharing is part of a more general cost containment result of the findings that emerged from the well policy dictated by health care financing problems. known Rand Health Insurance Experiment (HIE) Policy makers do, however, realize that the rev- [7, 8]. The literature was recently reviewed in two enue-generating capacity of these measures is lim- chapters of the Handbook of Health Economics ited and are aware of potential access problems Cutler and Zeckhauser 9) conclude from a review for low-income high-users. Therefore, the 1994 of the estimates that'The demand elasticities in co-payment rate increases were accompanied by the Rand Experiment have become the standard the introduction of income-related annual stop- in the literature, and essentially all economists loss arrangements. Two types of stop-loss were accept that traditional health insurance leads to fines a post-tax income-dependent cost-sharing Zweite te moral hazard in demand(p. 584).Also ceiling. All charges in excess of the ceiling are evidence from both the experimental and non- fully reimbursed. However, as in general such experimental literature, and they reach similar conclusions. It is now considered more or less reimbursement will only occur 2-3 years later received wisdom that: (i demand elasticities for (after the taxpayers have filed the tax return), its medical care are non-zero and negative but small, mmediate effect on health care consumption is fairly negligible, and will certainly not have had -0.2, (i)the price responsiveness is not higher groups, except for ambulatory care visits, (iii) low ser payment ceiling of 15000 BFr per year for levels of cost sharing have no discernible effects eral socially weaker groups: the low-income on health status; exceptions to this rule are indi OPI, long-term unemployed and certain in viduals with low socio-economic status viduals receiving welfare benefits. In practice, health, (iv) cost sharing primarily reduces medical however, relatively few people reached the ceiling consumption for less serious symptoms, (v)there for medicines) were excluded from the de- induced by cost sharing have a larger effect on ductible [4] the use of less effective outpatient care or non Despite a much more extensive use of patient indicated hospital admissions. Decreased utiliza- cost-sharing in Belgium, the frequency of physi- tion from cost sharing appears to affect the use of cian visits, especially to a general practitioner, is appropriate care to a similar degree as inappropri- much higher than in most other European coun- ate or rarely effective care, and(vi) price respon- tries. As shown by data from the European Com- siveness generally rises with rising rates of munity Household Panel Survey of 1996, for coinsurance xample, Belgium has the highest annual rate of However, the main advantage of the rand GP visits (5.24 visits per adult per year), and the Study, that is, that it was a carefully designed fourth highest number of specialist visits(1.89 per experiment, in which only selected individual adult per year) of all EU member states [5]. from a few selected sites were randomly assigned Belgium has traditionally also had exceptionally to groups with varying rates of coinsurance, was high rates of home visits by GPs, and although also considered its most significant limitation in the rate has been declining, still over 40% of all terms of policy relevance by some commentators Copyright a 2001 John Wiley Sons, Ltd Health Econ.10:457-471(2001)EFFECTS OF COST SHARING ON PHYSICIAN UTILIZATION 459 certain employees, and it only covers the co￾payments for hospitalizations, not for outpatient care. Recently, such private supplementary cover has begun to include pre- and post-hospitalization costs as well, but this type of policy was still very rare in 1994. The Belgian health insurance system has been making use of public sector cost sharing for decades, but in the early 1990s, user charges for GP and specialist services were raised substan￾tially in real terms for the general non-exempt population. The increased use of patient cost sharing is part of a more general cost containment policy dictated by health care financing problems. Policy makers do, however, realize that the rev￾enue-generating capacity of these measures is lim￾ited and are aware of potential access problems for low-income high-users. Therefore, the 1994 co-payment rate increases were accompanied by the introduction of income-related annual stop￾loss arrangements. Two types of stop-loss were introduced. The so-called ‘franchise fiscale’ de￾fines a post-tax income-dependent cost-sharing ceiling. All charges in excess of the ceiling are fully reimbursed. However, as in general such reimbursement will only occur 2–3 years later (after the taxpayers have filed the tax return), its immediate effect on health care consumption is fairly negligible, and will certainly not have had an influence on our study results. The franchise sociale on the other hand, defines an immediate co-payment ceiling of 15000 BFr per year for several socially weaker groups: the low-income WOPI, long-term unemployed and certain indi￾viduals receiving welfare benefits. In practice, however, relatively few people reached the ceiling since some important types of co-payments (such as for medicines) were excluded from the de￾ductible [4]. Despite a much more extensive use of patient cost-sharing in Belgium, the frequency of physi￾cian visits, especially to a general practitioner, is much higher than in most other European coun￾tries. As shown by data from the European Com￾munity Household Panel Survey of 1996, for example, Belgium has the highest annual rate of GP visits (5.24 visits per adult per year), and the fourth highest number of specialist visits (1.89 per adult per year) of all EU member states [5]. Belgium has traditionally also had exceptionally high rates of home visits by GPs, and although the rate has been declining, still over 40% of all GP visits were delivered at the patient’s home in 1994 [6]. But the level and mix of consultation rates also differ substantially by socio-economic group, as we will see in Section 4 below. EVIDENCE ON PRICE SENSITIVITY OF HEALTH CARE DEMAND In the literature, the effects of cost sharing now seem reasonably well understood. This is mainly a result of the findings that emerged from the well￾known Rand Health Insurance Experiment (HIE) [7,8]. The literature was recently reviewed in two chapters of the Handbook of Health Economics. Cutler and Zeckhauser [9] conclude from a review of the estimates that ‘The demand elasticities in the Rand Experiment have become the standard in the literature, and essentially all economists accept that traditional health insurance leads to moderate moral hazard in demand’ (p. 584). Also Zweifel and Manning [1] review the empirical evidence from both the experimental and non￾experimental literature, and they reach similar conclusions. It is now considered more or less received wisdom that: (i) demand elasticities for medical care are non-zero and negative, but small, typical estimates being in the range from −0.1 to −0.2, (ii) the price responsiveness is not higher for low-income groups than for high income groups, except for ambulatory care visits, (iii) low levels of cost sharing have no discernible effects on health status; exceptions to this rule are indi￾viduals with low socio-economic status and poor health, (iv) cost sharing primarily reduces medical consumption for less serious symptoms, (v) there is no evidence that reductions in consumption induced by cost sharing have a larger effect on the use of less effective outpatient care or non￾indicated hospital admissions. Decreased utiliza￾tion from cost sharing appears to affect the use of appropriate care to a similar degree as inappropri￾ate or rarely effective care, and (vi) price respon￾siveness generally rises with rising rates of coinsurance. However, the main advantage of the Rand Study, that is, that it was a carefully designed experiment, in which only selected individuals from a few selected sites were randomly assigned to groups with varying rates of coinsurance, was also considered its most significant limitation in terms of policy relevance by some commentators: Copyright © 2001 John Wiley & Sons, Ltd. Health Econ. 10: 457–471 (2001)