We use the Heckman’s two-step approach. In estimating the
equation for the positive number of physician visits, we include the
inverse mills ratio (lambda) which comes from a probit regression
for the decision to seek a physician using all observations. We use
as an exclusion restriction the choice to “opt out” of an employer
provided health insurance plan – so the indicator takes a one if an
individual is eligible for employer provided health insurance but
not covered, and 0 otherwise. We believe this reflects a choice or
preference for participation in the health care services market, but
not a significant determinant for frequency of physician visits.5