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Efficiency of health care delivery systems: effects of health insurance coverage

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  • Melanie Cozad
  • Bruno Wichmann

Abstract

Health insurance expansions may increase the demand for care-creating incentives for health systems to increase input consumption. The possibility remains that added capacity and personnel will have little effect on health outcomes, decreasing the technical efficiency of health care delivery systems. We estimate that a 1 percentage point increase in health insurance coverage decreases the technical efficiency of health care delivery by 1.3 percentage points, translating into approximately 50 billion dollars in additional health expenditures. This finding uncovers a previously unexplored consequence of changes in health insurance on the supply side of health care markets suggesting one avenue through which health care costs growth may occur.

Suggested Citation

  • Melanie Cozad & Bruno Wichmann, 2013. "Efficiency of health care delivery systems: effects of health insurance coverage," Applied Economics, Taylor & Francis Journals, vol. 45(29), pages 4082-4094, October.
    • Handle: RePEc:taf:applec:v:45:y:2013:i:29:p:4082-4094
    DOI: 10.1080/00036846.2012.750420
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    1. Järviö, Maija-Liisa & Luoma, Kalevi & Räty, Tarmo & Aaltonen, Juho, 2005. "Productivity and its Drivers in Finnish Primary Care 1988-2003," Research Reports 118, VATT Institute for Economic Research.
    2. Miller, Sarah, 2012. "The effect of insurance on emergency room visits: An analysis of the 2006 Massachusetts health reform," Journal of Public Economics, Elsevier, vol. 96(11), pages 893-908.
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    Cited by:

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    2. Attila Cseh & Brandon Koford & Ryan Phelps, 2015. "Hospital Utilization and Universal Health Insurance Coverage: Evidence from the Massachusetts Health Care Reform Act," Applied Health Economics and Health Policy, Springer, vol. 13(6), pages 627-635, December.

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