How Consumer Spending Reductions Within Healthcare Services Are Achieved By Critically Analyzing The Progression From Previous And Subsequent

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Motivation Introduction of Paper A firm with a sample size of approximately 160,000 American employees (including their dependents) were provided with free health insurance (i.e. 0% co-pay) until they were compulsorily transitioned into a non-linear, high-deductible health insurance plan (HDHP). What is the impact of such a demand-side policy on their health care spending behaviour? This is a central question that the authors, Brot-Goldberg et al., of their 2015 paper seek to address. With their unique opportunity to explore this issue in a natural experiment, the authors find that the overall switch from a 0% cost-sharing plan to a non-linear HDHP caused an approximate 12.8% spending reduction in medical care. In this paper, I seek to…show more content…
Notwithstanding this claim, Brot-Goldberg et al. investigate further by specifically focusing on addressing the how and less on stating whether the consumer spending decreases when faced with a complex, non-linear high deductible plan. The Oregon Experiment: Effects of Medicaid on Clinical Outcomes In 2008, Baiker et al. seized the opportunity to look at the effects of Medicaid coverage through its expansion for low-income households in the metropolitan areas of Portland, Oregon. This was conducted by a random selection of approximately 30,000 names from a waiting list totalling 90,000 individuals. Such a lottery design allowed the authors to apply random assignment and study how the health outcome of this specific population of interest is affected by Medicaid. Similar to the RAND study, Baiker et al. (2008) find that insurance coverage (in this case, Medicaid) resulted in an increase in health care utilization along with improved health status (specifically limited to mental health). However, the authors limit their focus to the direction and causality of the effect and fail to provide an explanation on specifically how consumer behaviour is affected by the insurance coverage, which is an area of focus that Brot-Goldberg et al. (2015) bring to the literature at the time. Main Contributions of Paper (by Brot-Goldberg et al.) To address the previous studies’ shortcomings, Brot-Goldberg et al. address the how by decomposing the consumer spending dynamic into
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