Impact of differential copayment on patient healthcare choice: evidence from South Korean National Cohort Study

OBJECTIVE: We evaluate the effectiveness of mild disease differential copayment policy aimed at reducing unnecessary patient visits to secondary/tertiary healthcare institutions in South Korea. DESIGN: Retrospective study using difference-in-difference design. SETTING: Sample Research database provided by the Korean National Health Insurance Service, between 2010 and 2013. PARTICIPANTS: 206 947 patients who visited healthcare institutions to treat mild diseases during the sample period. METHODS: A linear probability model with difference-in-difference approach was adopted to estimate the changes in patients’ healthcare choices associated with the differential copayment policy. The dependent variable was a binary variable denoting whether a patient visited primary healthcare or secondary/tertiary healthcare to treat her/his mild disease. Patients’ individual characteristics were controlled with a fixed effect. RESULTS: We observed significant decrease in the proportion of patients choosing secondary/tertiary healthcare over primary healthcare by 2.99 per cent point. The decrease associated with the policy was smaller by 14% in the low-income group compared with richer population, greater by 19% among the residents of Seoul metropolitan area than among people living elsewhere, and greater among frequent healthcare visitors by 33% than among people who less frequently visit healthcare. CONCLUSION: The mild disease differential copayment policy of South Korea was successful in discouraging unnecessary visits to secondary/tertiary healthcare institutions to treat mild diseases that can be treated well in primary healthcare.