Offset Effects of Outpatient Cost-sharing for the Poor in Korea

Objective: The objective of this study was to evaluate the impacts of the implementation of patient cost-sharing for an outpatient visit and prescription drugs for poor and nonable bodied Koreans in 2007. Data Sources/Study Settings: Nationally-representative longitudinal data sets (Korea Welfare Panel Study and the Korean Longitudinal Study of Ageing) in 2006, 2008, and 2010. Research Design: Propensity score matching with difference-in-differences framework exploiting within-person variation in cost-sharing. Results: Decreases in the probability of outpatient visit are offset by increases in the likelihood of hospitalization after the policy change. Cost-sharing also decreases drug adherence by 20%, particularly among chronically-ill persons. Conclusion: Because the costs of increased hospitalization among Medical Aid enrollees accrue to the government, the introduction of outpatient cost-sharing does not achieve the goal of cost control.