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Moral Hazard And The Demand For Health Services: A Matching Estimator Approach

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  • Pedro Pita Barros
  • Matilde P. Machado

    ()

  • Anna Sanz de Galdeano

Abstract

In this paper 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. It is hard to think, however, of any variable that a priori would be a good instrument and, therefore, we take a different approach. We concentrate on the most common health insurance plan in the Portuguese Health Survey, (ADSE), which is given to all civil servants and their dependants. We argue that this insurance is exogenous for most people i.e. not correlated with their health status. Under this identifying assumption we estimate the impact of having ADSE coverage on three different health services using a matching estimator technique. The measures of demand for health services are number of visits, number of blood and urine tests, and the probability of visiting a dentist. Preliminary results show large effects of ADSE for number of visits and tests among the young (18 to 30 years old) but only for tests are these effects statistically significantly different from zero. The magnitude of the effects represent 21.8 and 30 percent 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. Finally, we argue that there is evidence of a positive cumulative effect of ADSE over the years.

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Bibliographic Info

Paper provided by Universidad Carlos III, Departamento de Economía in its series Economics Working Papers with number we055928.

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Date of creation: Oct 2005
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Handle: RePEc:cte:werepe:we055928

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  1. Imbens, Guido & Abadie, Alberto, 2008. "On the Failure of the Bootstrap for Matching Estimators," Scholarly Articles 3043415, Harvard University Department of Economics.
  2. Chiappori, Pierre-Andre & Durand, Franck & Geoffard, Pierre-Yves, 1998. "Moral hazard and the demand for physician services: First lessons from a French natural experiment," European Economic Review, Elsevier, Elsevier, vol. 42(3-5), pages 499-511, May.
  3. �ngel Marcos Vera-Hernández, 1999. "Duplicate coverage and demand for health care. The case of Catalonia," Health Economics, John Wiley & Sons, Ltd., John Wiley & Sons, Ltd., vol. 8(7), pages 579-598.
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  5. Manning, Willard G, et al, 1987. "Health Insurance and the Demand for Medical Care: Evidence from a Randomized Experiment," American Economic Review, American Economic Association, American Economic Association, vol. 77(3), pages 251-77, June.
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  7. Frank Windmeijer & Joao Santos Silva, 1996. "Endogeneity in count data models; an application to demand for health care," IFS Working Papers, Institute for Fiscal Studies W96/15, Institute for Fiscal Studies.
  8. Alberto HOLLY & Lucien GARDIOL & Gianfranco DOMENIGHETTI & Brigitte BISIG, 1998. "An Econometric Model of Health Care Utilization and Health Insurance in Switzerland," Cahiers de Recherches Economiques du Département d'Econométrie et d'Economie politique (DEEP), Université de Lausanne, Faculté des HEC, DEEP 9803, Université de Lausanne, Faculté des HEC, DEEP.
  9. Gardiol, Lucien & Geoffard, Pierre-Yves & Grandchamp, Chantal, 2005. "Separating Selection and Incentive Effects in Health Insurance," CEPR Discussion Papers, C.E.P.R. Discussion Papers 5380, C.E.P.R. Discussion Papers.
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  14. Coulson, N Edward, et al, 1995. "Estimating the Moral-Hazard Effect of Supplemental Medical Insurance in the Demand for Prescription Drugs by the Elderly," American Economic Review, American Economic Association, American Economic Association, vol. 85(2), pages 122-26, May.
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Cited by:
  1. 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, Elsevier, vol. 113(1), pages 61-68.
  2. Pedro Ramos & Álvaro Almeida, 2014. "The Impact of An Increase in User Costs on the Demand For Emergency Services: The Case of Portuguese Hospitals," FEP Working Papers, Universidade do Porto, Faculdade de Economia do Porto 531, Universidade do Porto, Faculdade de Economia do Porto.
  3. Aida Isabel Tavares & Pedro Pita Barros, 2011. "Ex-ante Moral Hazard and Primary Prevention, evidence from Portugal," Working Papers de Economia (Economics Working Papers), Departamento de Economia, Gestão e Engenharia Industrial, Universidade de Aveiro 56, Departamento de Economia, Gestão e Engenharia Industrial, Universidade de Aveiro.
  4. Omar Paccagnella & Vincenzo Rebba & Guglielmo Weber, 2013. "VOLUNTARY PRIVATE HEALTH INSURANCE AMONG THE OVER 50s IN EUROPE," Health Economics, John Wiley & Sons, Ltd., John Wiley & Sons, Ltd., vol. 22(3), pages 289-315, 03.
  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, Tinbergen Institute 11-108/3, Tinbergen Institute.
  6. Layte, Richard & Nolan, Anne, 2013. "Income-Related Inequity in the Use of GP Services: A Comparison of Ireland and Scotland," Papers, Economic and Social Research Institute (ESRI) WP454, Economic and Social Research Institute (ESRI).
  7. 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, Springer, vol. 12(1), pages 1-38, March.
  8. 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, Tinbergen Institute 11-108/3, Tinbergen Institute.
  9. José Murteira & Óscar Lourenço, 2011. "Health care utilization and self-assessed health: specification of bivariate models using copulas," Empirical Economics, Springer, Springer, vol. 41(2), pages 447-472, October.
  10. 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, HEDG, c/o Department of Economics, University of York 09/21, HEDG, c/o Department of Economics, University of York.

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