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Moral Hazard and the Demand for Health Services: A Matching Estimator Approach

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  • Machado, Matilde Pinto
  • Pita Barros, Pedro Luis
  • Sanz-de-Galdeano, Anna

Abstract

We estimate the impact of health insurance coverage beyond National Health Insurance on the demand for several health services. Traditionally, the literature has tried to deal with the endogeneity of the private (extra) insurance decision by finding instrumental variables. Since a priori instrumental variables are hard to find we take a different approach. We focus on the most common health insurance plan in Portugal, ADSE, which is given to all civil servants and their dependants. We argue this insurance is exogenous i.e. not correlated with beneficiaries’ health status. This identifying assumption allows us to estimate the impact of having ADSE coverage on three different health services using a matching estimator technique. The health services used are: number of visits, number of blood and urine tests, and the probability of visiting a dentist. Results show large positive effects of ADSE for number of visits and tests among the young (18 to 30 years old) but only the latter is statistically significantly different from zero. The effects represent 21.8 and 30% of the average number of visits and tests for the young. On the contrary, we find no evidence of moral hazard on the probability of visiting a dentist.

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Paper provided by C.E.P.R. Discussion Papers in its series CEPR Discussion Papers with number 5488.

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Date of creation: Feb 2006
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Handle: RePEc:cpr:ceprdp:5488

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Keywords: demand for health services; matching estimator; moral hazard; Portuguese health system;

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Cited by:
  1. repec:dgr:uvatin:2011108 is not listed on IDEAS
  2. Omar Paccagnella & Vincenzo Rebba & Guglielmo Weber, 2013. "VOLUNTARY PRIVATE HEALTH INSURANCE AMONG THE OVER 50s IN EUROPE," Health Economics, John Wiley & Sons, Ltd., vol. 22(3), pages 289-315, 03.
  3. Søgaard, Rikke & Pedersen, Morten Saaby & Bech, Mickael, 2013. "To what extent does employer-paid health insurance reduce the use of public hospitals?," Health Policy, Elsevier, vol. 113(1), pages 61-68.
  4. José Murteira & Óscar Lourenço, 2011. "Health care utilization and self-assessed health: specification of bivariate models using copulas," Empirical Economics, Springer, vol. 41(2), pages 447-472, October.
  5. Jaume Puig-Junoy & Pilar Garcia-Gomez & David Casado-Marin, 2011. "Free Medicines thanks to Retirement: Moral Hazard and Hospitalization Offsets in an NHS," Tinbergen Institute Discussion Papers 11-108/3, Tinbergen Institute.
  6. Astrid Kiil, 2012. "Does employment-based private health insurance increase the use of covered health care services? A matching estimator approach," International Journal of Health Care Finance and Economics, Springer, vol. 12(1), pages 1-38, March.
  7. Layte, Richard & Nolan, Anne, 2013. "Income-Related Inequity in the Use of GP Services: A Comparison of Ireland and Scotland," Papers WP454, Economic and Social Research Institute (ESRI).
  8. Aida Isabel Tavares & Pedro Pita Barros, 2011. "Ex-ante Moral Hazard and Primary Prevention, evidence from Portugal," Working Papers de Economia (Economics Working Papers) 56, Departamento de Economia, Gestão e Engenharia Industrial, Universidade de Aveiro.
  9. Moreira S & Pita Barros P, 2009. "Double coverage and demand for health care: Evidence from quantile regression," Health, Econometrics and Data Group (HEDG) Working Papers 09/21, HEDG, c/o Department of Economics, University of York.

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