An experimental investigation of mixed systems of public and private health care finance
AbstractThis paper presents the results of a revealed-choice experiment testing the theoretical predictions of a model of a mixed system of public and private finance. We investigate behavioural responses in individuals’ willingnesses-to-pay for private health insurance to changes in the public sector allocation rule (needs-based vs. random), the supply of health care resources, and the size of the public health care budget. Of particular interest is how willingness-to-pay for private insurance feeds back into the determination of the equilibrium price of health care resources, the probability of public treatment and which individuals are left untreated. Our findings are generally consistent with the predictions of the theoretical model, although individuals consistently exhibit greater willingnesses-to-pay for private insurance than predicted resulting in a larger than predicted amount of private insurance being purchased. A commonly used risk-aversion measure only partially explains this observed deviation. We also find that, relative to a system of public financing only, a mixed system of health care finance results in higher health care prices and sicker, poorer people being left untreated.
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Bibliographic InfoArticle provided by Elsevier in its journal Journal of Economic Behavior & Organization.
Volume (Year): 84 (2012)
Issue (Month): 3 ()
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Web page: http://www.elsevier.com/locate/jebo
Experiment; Health care finance; Public health care; Rationing; Needs-based allocation; Health insurance;
Other versions of this item:
- Neil J. Buckley & Katherine Cuff & Jeremiah Hurley & Logan McLeod & Stuart Mestelman & David Cameron, 2012. "An Experimental Investigation of Mixed Systems of Public and Private Health Care Finance," Department of Economics Working Papers 2012-02, McMaster University.
- I13 - Health, Education, and Welfare - - Health - - - Health Insurance, Public and Private
- C92 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Group Behavior
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