The Impact of An Increase in User Costs on the Demand For Emergency Services: The Case of Portuguese Hospitals

Evidence on the impact of user costs on healthcare demand in “universal” public National Health Service (NHS) systems is scarce. The changes in copayments and in the regulation of the provision of free patient transportation, introduced in early 2012 in Portugal, provide a natural experiment to evaluate that impact. However, those changes in user costs were accompanied with changes in the criteria that determine which patients are exempt from copayments, implying that changes to the underlying populations made simple comparisons of user rates meaningless. The aim of this paper is to evaluate the impact of increases in direct and indirect user costs on the demand for emergency services (ES), in the context of changes to the underlying populations of exempt and non-exempt patients. Our contributions are twofold: we develop a new methodology for analyzing ES demand changes following user cost increases when the underlying population is not constant, and we measure the relative impact of copayments and distance costs on ES demand, in NHS-countries, with “almost free” access to healthcare. Our results show that the increase in copayments did not have a significant effect in moderating ES demand by paying users. On the other hand, we find a significant effect of the change in transport regulation in the demand for ES, especially in the more general polyvalent ES and for older patients. Thus, our results support the conclusion that indirect costs may be more important than direct costs in determining healthcare demand in NHS-countries where copayments are small and wide exemption schemes are in place, especially for older patients.