How does searching for health information on the Internet affect individuals' demand for health care services?

The emergence of the Internet made health information, which previously was almost exclusively available to health professionals, accessible to the general public. Access to health information on the Internet is likely to affect individuals' health care related decisions. The aim of this analysis is to determine how health information that people obtain from the Internet affects their demand for health care. I use a novel data set, the U.S. Health Information National Trends Survey (2003-07), to answer this question. The causal variable of interest is a binary variable that indicates whether or not an individual has recently searched for health information on the Internet. Health care utilization is measured by an individual's number of visits to a health professional in the past 12 months. An individual's decision to use the Internet to search for health information is likely to be correlated to other variables that can also affect his/her demand for health care. To separate the effect of Internet health information from other confounding variables, I control for a number of individual characteristics and use the instrumental variable estimation method. As an instrument for Internet health information, I use U.S. state telecommunication regulations that are shown to affect the supply of Internet services. I find that searching for health information on the Internet has a positive, relatively large, and statistically significant effect on an individual's demand for health care. This effect is larger for the individuals who search for health information online more frequently and people who have health care coverage. Among cancer patients, the effect of Internet health information seeking on health professional visits varies by how long ago they were diagnosed with cancer. Thus, the Internet is found to be a complement to formal health care rather than a substitute for health professional services.