Illness severity and the use of public health care by the privately insured. Is there a link? (original) (raw)
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Public health care and private insurance demand: the waiting time as a link
Health care management science, 2000
This paper analyzes the effect of waiting times in the Spanish public health system on the demand for private health insurance. Expected utility maximization determines whether or not individuals buy a private health insurance. The decision depends not only on consumer's covariates such as income, socio-demographic characteristics and health status, but also on the quality of the treatment by the public provider. We interpret waiting time as a qualitative attribute of the health care provision. The empirical analysis uses the Spanish Health Survey of 1993. We cope with the absence of income data by using the Spanish Family Budget Survey of 1990-91 as a complementary data set, following the Arellano-Meghir method [4]. Results indicate that a reduction in the waiting time lowers the probability of buying private health insurance. This suggests the existence of a crowd-out in the health care provision market.
Public health care with waiting time: the role of supplementary private health care
Journal of Health Economics, 2003
We consider an economy where most of the health care is publicly provided, and where there is waiting time for several types of treatments. Private health care without waiting time is an option for the patients in the public health queue. We show that although patients with low waiting costs will choose public treatment, they may be better off with waiting time than without. The reason is that waiting time induces patients with high waiting costs to choose private treatment, thus reducing the cost of public health care that everyone pays for. Even if higher quality (i.e. zero waiting time) can be achieved at no cost, the self-selection induced redistribution may imply that it is socially optimal to provide health care publicly and at an inferior quality level. We give a detailed discussion of the circumstances in which it is optimal to have waiting time for public health treatment. Moreover, we study the interaction between this quality decision and the optimal tax/subsidy on private health care.
Private health care as a supplement to a public health system with waiting time for treatment
2009
In this article the authors Michael Hoel and Erik Magnus Sæther consider an economy where most of the health care is publicly provided, and where there is waiting time for several types of treatments. Private health care without waiting time is an option for the patients in the public health queue. This article shows the effects of a tax (positive or negative) on private health care, and derives the socially optimal tax/subsidy. Finally, a discussion of how the size of the tax might affect the political support for a high quality public health system is provided.
Impact of private health insurance on the choice of public versus private hospital services
Health, Econometrics and Data Group (HEDG) …, 2008
The Australian health system is characterised by a mix of public and private service and private health insurance is used in addition to a compulsory universal public insurance to finance health services. A series of reforms have been implemented over the years in order to expand the private sector with the objective to relieve the overburdened public health care system. While private coverage has expanded, a large proportion of the privately insured still opt for public treatment in hospitals. The objective of this paper is to investigate the determinants of individuals' choice between public and private hospital services, in particular, the impact of private health insurance status. It estimates a recursive trivariate probit system model with partial observability that allows for endogeneity of private insurance participation and potential selection bias as we only observe individuals' public/private choices for those who have visited a hospital in the past 12 months. Relative to the prevailing two-step estimation for sample selection or endogenous treatment, our full information maximum likelihood (FIML) approach is both consistent and efficient. The study identifies private health insurance status and income as important determinants of private hospital care utilisation. An individual with a private hospital cover has nearly 70 per cent higher chance to opt for private treatment in a hospital and a person within the tenth income decile group has 46 per cent higher probability to seek private hospital care than someone who falls in the third or lower income decile groups. To some extent other factors such as perceived quality of care in the public sector and cost of access are also found to have some impact on the use of private hospital care.
The Australian health system is characterised by a mix of public and private service and private health insurance is used in addition to a compulsory universal public insurance to finance health services. A series of reforms have been implemented over the years in order to expand the private sector with the objective to relieve the overburdened public health care system. While private coverage has expanded, a large proportion of the privately insured still opt for public treatment in hospitals. The objective of this paper is to investigate the determinants of individuals' choice between public and private hospital services, in particular, the impact of private health insurance status. It estimates a recursive trivariate probit system model with partial observability that allows for endogeneity of private insurance participation and potential selection bias as we only observe individuals' public/private choices for those who have visited a hospital in the past 12 months. Relative to the prevailing two-step estimation for sample selection or endogenous treatment, our full information maximum likelihood (FIML) approach is both consistent and efficient. The study identifies private health insurance status and income as important determinants of private hospital care utilisation. An individual with a private hospital cover has nearly 70 per cent higher chance to opt for private treatment in a hospital and a person within the tenth income decile group has 46 per cent higher probability to seek private hospital care than someone who falls in the third or lower income decile groups. To some extent other factors such as perceived quality of care in the public sector and cost of access are also found to have some impact on the use of private hospital care.
Public and Private Provision of Health Care
Journal of Economics & Management Strategy, 2002
One of the mechanisms that is implemented in the cost containment wave in the health care sectors in western countries is the definition, by the third-party payer, of a set of preferred providers. The insured patients have different access rules to such providers when ill. The rules specify the co-payments and the indemnity the patient obtains if patronizing an out-of-plan care provider. We propose to study the competitive process among providers in terms of both prices and qualities. Competition is influenced among other factors by the status of providers as in-plan or out-of-plan care providers. Also, we face a moral hazard of provider choice related to the trade-off between freedom to choose and the need to hold down costs. Our main findings are that we can define a reimbursement scheme when decisions on prices and qualities are taken simultaneously (that we relate to primary health care sectors) such that the first-best allocation is achieved. In contrast, some type of regulation is needed to achieve the optimal solution when decisions are sequential (specialized health care sector). We also derive some normative conclusions on the way price controls should be implemented in some European Union Member States.
Shifting public-health-sector waiting lists to the private sector
European Journal of Political Economy, 2003
I analyze the public health administration's (PbHA's) decisions on waiting lists for public treatments. The PbHA maximizes a utilitarian social welfare function. Patients differ in their waiting costs, which in turn depend on patient's severity. Patients choose between waiting for free treatment in the public sector and paying for immediate treatment in the private sector. I show that (1) the administration's incentives to reduce waiting lists are weakened by the presence of a private sector, and (2) that this effect is reinforced if private treatment fees are regulated, which implies that waiting time is longest in the latter case. D
Private care and public waiting
Australian Health Review, 2005
Waiting time for public hospital care is a regular matter for political debate One political response has been to suggest that expanding private sector activity will reduce public waiting times. This paper tests the hypothesis that increased private activity in the health system is associated with reduced waiting times using secondary analysis of hospital activity data for 2001-02.
Demand for private health insurance: how important is the quality gap?
Health economics, 2003
Perceived quality of private and public health care, income and insurance premium are among the determinants of demand for private health insurance (PHI). In the context of a model in which individuals are expected utility maximizers, the non purchasing choice can result in consuming either public health care or private health care with full cost paid out-of-pocket. This paper empirically analyses the effect of the determinants of the demand for PHI on the probability of purchasing PHI by estimating a pseudo-structural model to deal with ...
Prioritizing public health expenditures when there is a private alternative
Memorandum (institute of Pacific Relations, American Council), 2005
Cost-effectiveness analysis often plays an important role in prioritization among different types of public health expenditures. Cost-effectiveness is defined as the maximal health benefits for given expenditures on health care. With a private health sector as a supplement to the public sector, the socially optimal ranking of treatments to be included in the public health program is changed. The larger are the costs per treatment for a given benefit-cost ratio, the higher priority should the treatment be given. The more heterogeneous preferences for a particular treatment are, the lower priority should this treatment be given. If the health budget does not exceed the socially optimal size, treatments with sufficiently low costs should not be performed by the public health system if there is a private alternative