Does the framing of patient cost-sharing incentives matter? The effects of deductibles vs. no-claim refunds

Understanding how health care utilization responds to cost-sharing is of central importance for providing high quality care and limiting the growth of costs. We study whether the framing of cost-sharing incentives has an effect on health care utilization. For this we make use of a policy change in the Netherlands. Until 2007, patients received a refund if they consumed little or no health care; the refund was the lower the more care they had consumed. From 2008 onward, there was a deductible. This means that very similar economic incentives were first framed in terms of smaller gains and later as losses. We find that patients react to incentives much more strongly when they are framed in terms of losses. The effect on yearly spending is 8.6 percent. This suggests that discussions on the optimal design of cost-sharing incentives should also revolve around the question how these are presented to patients.