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Medical Insurance Coverage and Health Production Efficiency

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  • Laurie J. Bates
  • Kankana Mukherjee
  • Rexford E. Santerre

Abstract

Conventional economic theory predicts that medical insurance coverage causes an inefficient production of health because of "ex ante" and "ex post" moral hazard effects. However, no research has empirically examined the magnitude of the inefficiency. This study empirically examines the impact of medical insurance on the technical efficiency of health production at the metropolitan level. The underlying health production function allows for preventive care, curative care, and behavioral factors. Data envelopment analysis determines relative technical efficiency. The multiple regression results indicate that insurance coverage generates inefficiency but the efficiency loss appears to be relatively small on the extensive margin. Copyright (c) The Journal of Risk and Insurance, 2010.

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Bibliographic Info

Article provided by The American Risk and Insurance Association in its journal Journal of Risk and Insurance.

Volume (Year): 77 (2010)
Issue (Month): 1 ()
Pages: 211-229

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Handle: RePEc:bla:jrinsu:v:77:y:2010:i:1:p:211-229

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Cited by:
  1. Kankana Mukherjee & Rexford Santerre & Ning Jackie Zhang, 2010. "Explaining the efficiency of local health departments in the U.S.: an exploratory analysis," Health Care Management Science, Springer, vol. 13(4), pages 378-387, December.
  2. Yi-Chung Hsu, 2014. "Efficiency in government health spending: a super slacks-based model," Quality & Quantity: International Journal of Methodology, Springer, vol. 48(1), pages 111-126, January.
  3. Georges Dionne & Kili C. Wang, 2011. "Does Opportunistic Fraud in Automobile theft Insurance Fluctuate with the Business Cycle ?," Cahiers de recherche 1121, CIRPEE.
  4. Georges Dionne & Kili Wang, 2013. "Does insurance fraud in automobile theft insurance fluctuate with the business cycle?," Journal of Risk and Uncertainty, Springer, vol. 47(1), pages 67-92, August.

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