Advanced Search
MyIDEAS: Login to save this paper or follow this series

Separating selection and incentive effects in health insurance

Contents:

Author Info

  • Lucien Gardiol

    (IEMS - Institut d'économie et de management de la santé - Université de Lausanne)

  • Pierre-Yves Geoffard

    (IEMS - Institut d'économie et de management de la santé - Université de Lausanne, PSE - Paris-Jourdan Sciences Economiques - CNRS : UMR8545 - École des Hautes Études en Sciences Sociales (EHESS) - École des Ponts ParisTech (ENPC) - École normale supérieure [ENS] - Paris, CEPR - Center for Economic Policy Research - CEPR)

  • Chantal Grandchamp

    (IEMS - Institut d'économie et de management de la santé - Université de Lausanne)

Abstract

This paper provides an analysis of the health insurance and health care consumption. A structural microeconomic model of joint demand for health insurance and health care is developed and estimated using full maximum likelihood method using Swiss insurance claims data for over 60 000 adult individuals. The estimation strategy relies on the institutional features of the Swiss system, in which each individual chooses among the same menu of contracts, ranked by the size of their deductible. The empirical analysis shows strong and robust evidence of selection effects. Nevertheless, once selection effects are controlled for, an important incentive effect ("ex-post moral hazard") remains. A decrease in the copayment rate from 100% to 10% increases the marginal demand for health care by about 90% and from 100% to 0% by about 150%. The correlation between insurance coverage and health care expenditures may be decomposed into the two effects: 75% may be attributed to selection, and 25 % to incentive effects.

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://halshs.archives-ouvertes.fr/docs/00/59/07/13/PDF/wp200538.pdf
Download Restriction: no

Bibliographic Info

Paper provided by HAL in its series PSE Working Papers with number halshs-00590713.

as in new window
Length:
Date of creation: Oct 2005
Date of revision:
Handle: RePEc:hal:psewpa:halshs-00590713

Note: View the original document on HAL open archive server: http://halshs.archives-ouvertes.fr/halshs-00590713
Contact details of provider:
Web page: http://hal.archives-ouvertes.fr/

Related research

Keywords: health insurance ; demand for health care ; moral hazard ; adverse selection ; full maximum likelihood estimation;

Other versions of this item:

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. Pierre-André Chiappori & Bernard Salanié, 1997. "Testing for Asymmetric Information in Insurance Markets," Working Papers, Centre de Recherche en Economie et Statistique 97-11, Centre de Recherche en Economie et Statistique.
  2. Manning, Willard G., 1998. "The logged dependent variable, heteroscedasticity, and the retransformation problem," Journal of Health Economics, Elsevier, Elsevier, vol. 17(3), pages 283-295, June.
  3. David M. Cutler & Sarah Reber, 1996. "Paying for Health Insurance: The Tradeoff between Competition and Adverse Selection," NBER Working Papers 5796, National Bureau of Economic Research, Inc.
  4. 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.
  5. David M. Cutler & Richard J. Zeckhauser, 1999. "The Anatomy of Health Insurance," NBER Working Papers 7176, National Bureau of Economic Research, Inc.
  6. Cardon, James H & Hendel, Igal, 2001. "Asymmetric Information in Health Insurance: Evidence from the National Medical Expenditure Survey," RAND Journal of Economics, The RAND Corporation, vol. 32(3), pages 408-27, Autumn.
  7. Lucien Gardiol & Pierre-Yves Geoffard & Chantal Grandchamp, 2003. "Separating Selection and Incentive Effects: an Econometric Study of Swiss Health Insurance Claims Data," DELTA Working Papers, DELTA (Ecole normale supérieure) 2003-27, DELTA (Ecole normale supérieure).
  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. 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.
  10. Mullahy, John, 1998. "Much ado about two: reconsidering retransformation and the two-part model in health econometrics," Journal of Health Economics, Elsevier, Elsevier, vol. 17(3), pages 247-281, June.
  11. Keeler, Emmett B & Newhouse, Joseph P & Phelps, C E, 1977. "Deductibles and the Demand for Medical Care Services: The Theory of a Consumer Facing a Variable Price Schedule under Uncertainty," Econometrica, Econometric Society, Econometric Society, vol. 45(3), pages 641-55, April.
  12. 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.
  13. Eichner, Matthew J, 1998. "The Demand for Medical Care: What People Pay Does Matter," American Economic Review, American Economic Association, American Economic Association, vol. 88(2), pages 117-21, May.
Full references (including those not matched with items on IDEAS)

Citations

Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
as in new window

Cited by:
  1. Trottmann, Maria & Zweifel, Peter & Beck, Konstantin, 2012. "Supply-side and demand-side cost sharing in deregulated social health insurance: Which is more effective?," Journal of Health Economics, Elsevier, Elsevier, vol. 31(1), pages 231-242.
  2. R. Kleef & K. Beck & W. Ven & R. Vliet, 2007. "Does risk equalization reduce the viability of voluntary deductibles?," International Journal of Health Care Finance and Economics, Springer, Springer, vol. 7(1), pages 43-58, March.
  3. Pau Olivella & Marcos Vera-Hernandez, 2006. "Testing for adverse selection into private medical insurance," IFS Working Papers, Institute for Fiscal Studies W06/02, Institute for Fiscal Studies.
  4. Erik Schokkaert & Tom Van Ourti & Diana De Graeve & Ann Lecluyse & Carine Van de Voorde, 2010. "Supplemental health insurance and equality of access in Belgium," Health Economics, John Wiley & Sons, Ltd., John Wiley & Sons, Ltd., vol. 19(4), pages 377-395.
  5. 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.
  6. Machado, Matilde Pinto & Pita Barros, Pedro Luis & Sanz-de-Galdeano, Anna, 2006. "Moral Hazard and the Demand for Health Services: A Matching Estimator Approach," CEPR Discussion Papers, C.E.P.R. Discussion Papers 5488, C.E.P.R. Discussion Papers.
  7. Marcel Bilger & Jean-Paul Chaze, 2008. "What Drives Individual Health Expenditure in Switzerland?," Swiss Journal of Economics and Statistics (SJES), Swiss Society of Economics and Statistics (SSES), Swiss Society of Economics and Statistics (SSES), vol. 144(III), pages 337-358, September.
  8. Michel Grignon & Marc Perronnin & John N. Lavis, 2008. "Does free complementary health insurance help the poor to access health care? Evidence from France," Health Economics, John Wiley & Sons, Ltd., John Wiley & Sons, Ltd., vol. 17(2), pages 203-219.
  9. Chantal Grandchamp & Lucien Gardiol, 2008. "Does a mandatory telemedicine call prior to visiting a physician reduce costs or simply attract good risks?," Working Papers, University of Lausanne, Institute of Health Economics and Management (IEMS) 0801, University of Lausanne, Institute of Health Economics and Management (IEMS).
  10. World Bank, 2009. "Europe and Central Asia - Health insurance and competition," World Bank Other Operational Studies 3064, The World Bank.
  11. Legal, Renaud & Plisson, Manuel, 2008. "Assurance dépendance, effets de sélection et antisélection," Economics Papers from University Paris Dauphine, Paris Dauphine University 123456789/5055, Paris Dauphine University.

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:hal:psewpa:halshs-00590713. 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: (CCSD).

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.