Advanced Search
MyIDEAS: Login to save this article or follow this journal

Measuring the effects of reducing subsidies for private insurance on public expenditure for health care

Contents:

Author Info

  • Cheng, Terence Chai
Registered author(s):

    Abstract

    This paper investigates the effects of reducing subsidies for private health insurance on public sector expenditure for hospital care. An econometric framework using simultaneous equation models is developed to analyse the interrelated decisions on the intensity and type of health care use and private insurance. The framework is applied to the context of the mixed public–private system in Australia. The simulation projections show that reducing premium subsidies is expected to generate net cost savings. This arises because the cost savings achieved from reducing subsidies are larger than the potential increase in public expenditure on hospital care.

    Download Info

    If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
    File URL: http://www.sciencedirect.com/science/article/pii/S016762961300163X
    Download Restriction: Full text for ScienceDirect subscribers only

    As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.

    Bibliographic Info

    Article provided by Elsevier in its journal Journal of Health Economics.

    Volume (Year): 33 (2014)
    Issue (Month): C ()
    Pages: 159-179

    as in new window
    Handle: RePEc:eee:jhecon:v:33:y:2014:i:c:p:159-179

    Contact details of provider:
    Web page: http://www.elsevier.com/locate/inca/505560

    Related research

    Keywords: Private health insurance; Subsidies; Public and private finance; Simultaneous equation models; Count data;

    Find related papers by JEL classification:

    References

    References listed on IDEAS
    Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
    as in new window
    1. Gruber, J. & Poterba, J., 1994. "Tax Incentives and the Decision to Purchase Health Insurance: Evidence from the Self-Employed," Working papers 94-10, Massachusetts Institute of Technology (MIT), Department of Economics.
    2. Daniele Fabbri & Chiara Monfardini, 2006. "Rationing the Public Provision of Health Care in the Presence of Private Supplements: Evidence from the Italian NHS," Health, Econometrics and Data Group (HEDG) Working Papers, HEDG, c/o Department of Economics, University of York 06/14, HEDG, c/o Department of Economics, University of York.
    3. �ngel Marcos Vera-Hernández, 1999. "Duplicate coverage and demand for health care. The case of Catalonia," Health Economics, John Wiley & Sons, Ltd., vol. 8(7), pages 579-598.
    4. Deb, Partha & Trivedi, Pravin K., 2002. "The structure of demand for health care: latent class versus two-part models," Journal of Health Economics, Elsevier, Elsevier, vol. 21(4), pages 601-625, July.
    5. Randall P. Ellis & Elizabeth Savage, 2008. "Run for Cover Now or Later? The impact of premiums, threats and deadlines on supplementary private health insurance in Australia," Boston University - Department of Economics - Working Papers Series, Boston University - Department of Economics wp2008-013, Boston University - Department of Economics.
    6. Cameron,A. Colin & Trivedi,Pravin K., 2013. "Regression Analysis of Count Data," Cambridge Books, Cambridge University Press, number 9781107014169, 9.
    7. Murat K. Munkin & Pravin K. Trivedi, 1999. "Simulated maximum likelihood estimation of multivariate mixed-Poisson regression models, with application," Econometrics Journal, Royal Economic Society, Royal Economic Society, vol. 2(1), pages 29-48.
    8. Chai Cheng, T; & Vahid, F;, 2010. "Demand for hospital care and private health insurance in a mixed publicprivate system: empirical evidence using a simultaneous equation modeling approach," Health, Econometrics and Data Group (HEDG) Working Papers, HEDG, c/o Department of Economics, University of York 10/25, HEDG, c/o Department of Economics, University of York.
    9. Train,Kenneth E., 2009. "Discrete Choice Methods with Simulation," Cambridge Books, Cambridge University Press, number 9780521747387, 9.
    10. Colm Harmon & Brian Nolan, 2001. "Health insurance and health services utilization in Ireland," Health Economics, John Wiley & Sons, Ltd., vol. 10(2), pages 135-145.
    11. Finkelstein, Amy, 2002. "The effect of tax subsidies to employer-provided supplementary health insurance: evidence from Canada," Journal of Public Economics, Elsevier, Elsevier, vol. 84(3), pages 305-339, June.
    12. Thomas Buchmueller, 2008. "Community Rating, Entry-Age Rating and Adverse Selection in Private Health Insurance in Australia*," The Geneva Papers on Risk and Insurance - Issues and Practice, Palgrave Macmillan, vol. 33(4), pages 588-609, October.
    13. H.E. Frech Iii & Sandra Hopkins & Garry Macdonald, 2003. "The Australian Private Health Insurance Boom: Was It Subsidies Or Liberalised Regulation?," Economic Papers, The Economic Society of Australia, The Economic Society of Australia, vol. 22(1), pages 58-64, 03.
    14. Jane Hall & Richard De Abreu Lourenco & Rosalie Viney, 1999. "Carrots and sticks-the fall and fall of private health insurance in Australia," Health Economics, John Wiley & Sons, Ltd., vol. 8(8), pages 653-660.
    15. Gruber, Jonathan & Washington, Ebonya, 2005. "Subsidies to employee health insurance premiums and the health insurance market," Journal of Health Economics, Elsevier, Elsevier, vol. 24(2), pages 253-276, March.
    16. Denise Doiron & Glenn Jones & Elizabeth Savage, 2008. "Healthy, wealthy and insured? The role of self-assessed health in the demand for private health insurance," Health Economics, John Wiley & Sons, Ltd., vol. 17(3), pages 317-334.
    17. Marquis, M. Susan & Louis, Thomas A., 2002. "On using sample selection methods in estimating the price elasticity of firms' demand for insurance," Journal of Health Economics, Elsevier, Elsevier, vol. 21(1), pages 137-145, January.
    18. Gowrisankaran, Gautam & Town, Robert J., 1999. "Estimating the quality of care in hospitals using instrumental variables," Journal of Health Economics, Elsevier, Elsevier, vol. 18(6), pages 747-767, December.
    19. Andreas Million & Regina T. Riphahn & Achim Wambach, 2003. "Incentive effects in the demand for health care: a bivariate panel count data estimation," Journal of Applied Econometrics, John Wiley & Sons, Ltd., John Wiley & Sons, Ltd., vol. 18(4), pages 387-405.
    20. Kiil, Astrid, 2012. "What characterises the privately insured in universal health care systems? A review of the empirical evidence," Health Policy, Elsevier, vol. 106(1), pages 60-75.
    21. Cameron, A. Colin & Trivedi, Pravin K., 1991. "The role of income and health risk in the choice of health insurance : Evidence from Australia," Journal of Public Economics, Elsevier, Elsevier, vol. 45(1), pages 1-28, June.
    22. Chai Cheng, T., 2011. "Measuring the effects of removing subsidies for private insurance on public expenditure for health care," Health, Econometrics and Data Group (HEDG) Working Papers, HEDG, c/o Department of Economics, University of York 11/32, HEDG, c/o Department of Economics, University of York.
    23. Daniel McFadden & Kenneth Train, 2000. "Mixed MNL models for discrete response," Journal of Applied Econometrics, John Wiley & Sons, Ltd., John Wiley & Sons, Ltd., vol. 15(5), pages 447-470.
    24. Atella, Vincenzo & Deb, Partha, 2008. "Are primary care physicians, public and private sector specialists substitutes or complements? Evidence from a simultaneous equations model for count data," Journal of Health Economics, Elsevier, Elsevier, vol. 27(3), pages 770-785, May.
    25. Propper, Carol, 2000. "The demand for private health care in the UK," Journal of Health Economics, Elsevier, Elsevier, vol. 19(6), pages 855-876, November.
    26. Bhat, Chandra R., 2001. "Quasi-random maximum simulated likelihood estimation of the mixed multinomial logit model," Transportation Research Part B: Methodological, Elsevier, Elsevier, vol. 35(7), pages 677-693, August.
    27. H. E. Frech & Sandra Hopkins, 2004. "Why Subsidise Private Health Insurance?," Australian Economic Review, The University of Melbourne, Melbourne Institute of Applied Economic and Social Research, The University of Melbourne, Melbourne Institute of Applied Economic and Social Research, vol. 37(3), pages 243-256, 09.
    28. Randall Ellis & Elizabeth Savage, 2008. "Run for cover now or later? The impact of premiums, threats and deadlines on private health insurance in Australia," International Journal of Health Care Finance and Economics, Springer, Springer, vol. 8(4), pages 257-277, December.
    29. Cameron, A C & P. K. Trivedi & Frank Milne & J. Piggott, 1988. "A Microeconometric Model of the Demand for Health Care and Health Insurance in Australia," Review of Economic Studies, Wiley Blackwell, Wiley Blackwell, vol. 55(1), pages 85-106, January.
    30. Petra E. Todd & Kenneth I. Wolpin, 2006. "Ex Ante Evaluation of Social Programs," PIER Working Paper Archive 06-022, Penn Institute for Economic Research, Department of Economics, University of Pennsylvania.
    31. Savage, Elizabeth & Wright, Donald J., 2003. "Moral hazard and adverse selection in Australian private hospitals: 1989-1990," Journal of Health Economics, Elsevier, Elsevier, vol. 22(3), pages 331-359, May.
    32. Mark Stabile, 2001. "Private insurance subsidies and public health care markets: evidence from Canada," Canadian Journal of Economics, Canadian Economics Association, vol. 34(4), pages 921-942, November.
    33. Joan Costa & Jaume Garcia, 2003. "Demand for private health insurance: how important is the quality gap?," Health Economics, John Wiley & Sons, Ltd., vol. 12(7), pages 587-599.
    34. Partha Deb & Pravin K. Trivedi, 2006. "Specification and simulated likelihood estimation of a non-normal treatment-outcome model with selection: Application to health care utilization," Econometrics Journal, Royal Economic Society, Royal Economic Society, vol. 9(2), pages 307-331, 07.
    Full references (including those not matched with items on IDEAS)

    Citations

    Lists

    This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

    Statistics

    Access and download statistics

    Corrections

    When requesting a correction, please mention this item's handle: RePEc:eee:jhecon:v:33:y:2014:i:c:p:159-179. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Zhang, Lei).

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If references are entirely missing, you can add them using this form.

    If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.