Health status and the demand for health. Results on price elasticities

Abstract

The relationship between measured health status and the elasticity of demand for ambulatory physician services is estimated using data from the National Medical Care Utilization and Expenditure Survey (NMCUES). Although the theoretical relationship between health status and demand elasticity is ambiguous, results obtained in this study suggest that declines in health reduce the elasticity of the initial decision to seek care, but have no discernible effect on the elasticity of demand at mean levels of consumption. These results are consistent with the findings of Rand's HIE, and suggest that consumer price sharing has little effect on initial access to physicians for those in poor health.