The impact of direct and extra billing for medical services: evidence from a natural experiment in British Columbia

This paper examines the impact of direct and extra billing on patient demand for medical services as well as physicians' responses to changing patient demand. These issues are examined in the context of a "natural experiment" in British Columbia, Canada where, in 1992, 81 general practitioners and specialists "opted-out" of the provincial Medical Services Plan (MSP) and began direct and extra billing their patients. These opted-out physicians are compared to a matched sample of physicians who remained within the MSP. Switching costs for patients were relatively low because of the availability of non-direct/extra billing physicians. The data consists of the more than 140,000 patient visit claims over a 2-year time period, one year immediately prior to the opting-out date and one year immediately following. The results of this study show that, on average, female visits to opted-out general practitioners (GPs) dropped approx. 9% after direct/extra billing. There was no concurrent drop for male patient visits. On average, patient visits to opted-out specialists dropped approx. 6%. Within the observed timeframe, opted-out physicians' billing patterns changed; somewhat offsetting this demand decrease. On average, opted-out GPs' payments per remaining patient increased by 10% following direct/extra billing (the post period), while opted-out specialists' payments per patient increased by 7%. There were no corresponding changes in payments per patient for the control group of physicians who remained opted-in.Cost-sharing Health financing Health services Price elasticity User fees Utilization

The 'neighbor effect': Simulating dynamics in consumer preferences for new vehicle technologies

Understanding consumer behaviour is essential in designing policies that efficiently increase the uptake of clean technologies over the long-run. Expert opinion or qualitative market analyses have tended to be the sources of this information. However, greater scrutiny on governments increasingly demands the use of reliable and credible evidence to support policy decisions. While discrete choice research and modeling techniques have been applied to estimate consumer preferences for technologies, these methods often assume static preferences. This study builds on the application of discrete choice research and modeling to capture dynamics in consumer preferences. We estimate Canadians' preferences for new vehicle technologies under different market assumptions, using responses from two national surveys focused on hybrid gas-electric vehicles and hydrogen fuel cell vehicles. The results support the relevance of a range of vehicle attributes beyond the purchase price in shaping consumer preferences towards clean vehicle technologies. They also corroborate our hypothesis that the degree of market penetration of clean vehicle technologies is an influence on people's preferences ('the neighbor effect'). Finally, our results provide behavioural parameters for the energy-economy model CIMS, which we use here to show the importance of including consumer preference dynamics when setting policies to encourage the uptake of clean technologies.HEV HFCV Stated preferences DCM Consumer preference dynamics