Family Spillovers In Healthcare Consumption: Evidence From a Southern Healthcare Payor
Abstract: This paper studies how family spillovers affect healthcare consumption through behavioral changes where risks and consequences of health events are shared and transmitted in the family. By exploiting an unpredictable shock, a heart attack, to a family member, I draw a causal link to their dependents’ average medical expenditures. The spouse’s heart attack is used as a source of exogenous variation in healthcare consumption of non-injured family members since this event is relatively unpredictable and random for non-injured family members. Under this setting, I aim to compare the healthcare consumption in the pre- and post-shock periods to estimate family spillovers. For this purpose, I use claims data provided by a southern healthcare payor in the U.S. providing detailed information on the healthcare consumption of family members and various member-level characteristics, such as demographic and socioeconomic characteristics, chronic conditions, and income. I employ an OLS regression to compare the average health consumption before and after the spouse’s heart attack. The results show that the family spillover effect has a statistically significant and positive impact on non-injured family members’ healthcare consumption. In particular, I find that non-injured family members increased their average medical expenses by $571 in the post-period of their spouses’ heart attack relative to prior to the health shock. Moreover, I explore the effect of the health shock on different subgroups. The following subgroups show a statistically significant increase in average medical expenses after experiencing a health shock: individuals without chronic conditions, individuals who identify as White, females, and those with lower levels of education.
Available here