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Does the reason for buying health insurance influence behaviour? CHERE Working Paper 2006/1

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Author Info

  • Denzil Fiebig

    ()
    (University of NSW)

  • Elizabeth Savage

    ()
    (CHERE, University of Technology, Sydney)

  • Rosalie Viney

    ()
    (CHERE, University of Technology, Sydney)

Abstract

The inter-relationship between private health insurance cover and hospital utilisation is complex. The current policy approach in Australia appears to rely on relatively simple models of the relationships between health insurance coverage, and public and private hospital use. There is considerable evidence of unexplained heterogeneity among the privately insured population. Heterogeneity of preferences is likely to be important not just in determining the uptake of private health insurance, but also the impact of changes in private health insurance on the use of private treatment. A number of studies have used attitudinal variables to model heterogeneity of preferences in other contexts. This study uses the 2001 ABS National Health Survey to identify ?types? among the insured population using their stated reasons for purchasing private health insurance. We find that insurance type is significantly associated with hospital utilisation, particularly the probability of being admitted as a public or private patient. We also find that the government?s insurance incentives were more attractive to particular types of the insured population. This has implications for the effectiveness of the insurance incentives and for the design of policies that aim to reduce pressure on the public hospital system.

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File URL: http://www.chere.uts.edu.au/pdf/wp2006_1.pdf
File Function: First version, 2006
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Bibliographic Info

Paper provided by CHERE, University of Technology, Sydney in its series Working Papers with number 2006/1.

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Date of creation: Jul 2006
Date of revision:
Handle: RePEc:her:chewps:2006/1

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Web page: http://www.chere.uts.edu.au
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Related research

Keywords: Private health insurance; health policy; Australia;

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References

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  1. Propper, Carol, 1993. "Constrained choice sets in the U.K. demand for private medical insurance," Journal of Public Economics, Elsevier, vol. 51(3), pages 287-307, July.
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  4. Vaithianathan, Rhema, 2002. "Will Subsidising Private Health Insurance Help the Public Health System?," The Economic Record, The Economic Society of Australia, vol. 78(242), pages 277-83, September.
  5. Ika Darnhofer & Walter Schneeberger & Bernhard Freyer, 2005. "Converting or not converting to organic farming in Austria:Farmer types and their rationale," Agriculture and Human Values, Springer, vol. 22(1), pages 39-52, 03.
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  8. Propper, Carol, 2000. "The demand for private health care in the UK," Journal of Health Economics, Elsevier, vol. 19(6), pages 855-876, November.
  9. Harris, Katherine M. & Keane, Michael P., 1998. "A model of health plan choice:: Inferring preferences and perceptions from a combination of revealed preference and attitudinal data," Journal of Econometrics, Elsevier, vol. 89(1-2), pages 131-157, November.
  10. 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.
  11. Randall P. Ellis & Elizabeth Savage, 2005. "Where do you run after you run for cover? The impact on premium changes on the characteristics of the privately insured in Australia," Boston University - Department of Economics - Working Papers Series WP2005-020, Boston University - Department of Economics.
  12. 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.
  13. Denise Doiron & Glenn Jones & Elizabeth Savage, 2006. "Healthy, wealthy and insured? The role of self-assessed health in the demand for private health insurance, CHERE Working Paper 2006/2," Working Papers 2006/2, CHERE, University of Technology, Sydney.
  14. Partha Deb & Chenghui Li & Pravin K. Trivedi & David M. Zimmer, 2006. "The effect of managed care on use of health care services: results from two contemporaneous household surveys," Health Economics, John Wiley & Sons, Ltd., vol. 15(7), pages 743-760.
  15. Amir Shmueli, 2001. "The effect of health on acute care supplemental insurance ownership: an empirical analysis," Health Economics, John Wiley & Sons, Ltd., vol. 10(4), pages 341-350.
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Citations

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Cited by:
  1. Stephanie Knox & Elizabeth Savage & Denzil Fiebig & Vineta Salale, 2007. "Joiners, leavers, stayers and abstainers: Private health insurance choices in Australia, CHERE Working Paper 2007/8," Working Papers 2007/8, CHERE, University of Technology, Sydney.
  2. Damien S.Eldridge & Ilke Onur & Malathi Velamuri & Cagatay Koc, 2013. "The Impact of Private Hospital Insurance on the Utilization of Hospital Care In Australia," Working Papers 2013.03, School of Economics, La Trobe University.
  3. 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.
  4. Meliyanni Johar & Glenn Jones & Michael Keane & Elizabeth Savage & Olena Stavrunova, 2010. "Waiting times and the decision to buy private health insurance. CHERE Working Paper 2010/9," Working Papers 2010/9, CHERE, University of Technology, Sydney.

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