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

An Experimental Investigation of Mixed Systems of Public and Private Health Care Finance

Contents:

Author Info

  • Neil J. Buckley
  • Katherine Cuff
  • Jeremiah Hurley
  • Logan McLeod
  • Stuart Mestelman
  • David Cameron

Abstract

This paper presents the results of a revealed-choice experiment testing the theoretical predictions of a model of a mixed system of public and private finance. In the context of a mixed system of health care finance, we investigate behavioural responses to changing the public sector allocation rule (needs-based vs. random), the supply of health care resources, and the size of the public health care budget on the following outcomes: the equilibrium market price for health care resources, the number of individuals who purchase private insurance, the probability of health treatment in the public system for those without private insurance, the health status of individuals left untreated, and the incomes of individuals who receive treatment. Our findings are generally consistent with the predictions of the theoretical model, although individuals consistently exhibit greater willingnesses-to-pay for private insurance than predicted resulting in a larger than predicted amount of private insurance being purchased. A commonly used risk-aversion measure only partially explains this observed deviation. We also find that, relative to a system of public financing only, a mixed system of health care finance results in higher health care prices and sicker, poorer people being left untreated.

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://socserv.mcmaster.ca/econ/rsrch/papers/archive/2012-02.pdf
Download Restriction: no

Bibliographic Info

Paper provided by McMaster University in its series Department of Economics Working Papers with number 2012-02.

as in new window
Length: 33 pages
Date of creation: Apr 2012
Date of revision:
Handle: RePEc:mcm:deptwp:2012-02

Contact details of provider:
Postal: 1280 Main Street West, Hamilton, Ontario, L8S 4M4
Phone: (905) 525-9140 ext. 22765
Fax: (905) 521-8232
Email:
Web page: http://www.economics.mcmaster.ca/
More information through EDIRC

Related research

Keywords: experiment; health care finance; public health care; rationing; needs-based allocation.;

Other versions of this item:

Find related papers by JEL classification:

This paper has been announced in the following NEP Reports:

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. Heike Hennig-Schmidt & Reinhard Selten & Daniel Wiesen, 2009. "How Payment Systems Affect Physicians´ Provision Behaviour – An Experimental Investigation," Bonn Econ Discussion Papers, University of Bonn, Germany bgse29_2009, University of Bonn, Germany.
  2. Katherine Cuff & Jeremiath Hurley & Stuart Mestelman & Andrew Muller & Robert Nuscheler, 2007. "Public and Private Health Care Financing with Alternate Public Rationing," Department of Economics Working Papers, McMaster University 2007-07, McMaster University.
  3. Katherine Cuff & Jeremiah Hurley & Stuart Mestelman & Andrew Muller & Robert Nuscheler, 2012. "Public and private health‐care financing with alternate public rationing rules," Health Economics, John Wiley & Sons, Ltd., John Wiley & Sons, Ltd., vol. 21(2), pages 83-100, 02.
  4. Colm Harmon & Brian Nolan, 2001. "Health insurance and health services utilization in Ireland," Health Economics, John Wiley & Sons, Ltd., John Wiley & Sons, Ltd., vol. 10(2), pages 135-145.
  5. Smith, Vernon L, et al, 1982. "Competitive Market Institutions: Double Auctions vs. Sealed Bid-Offer Auctions," American Economic Review, American Economic Association, American Economic Association, vol. 72(1), pages 58-77, March.
  6. Chang, Fwu-Ranq, 1996. "Uncertainty and investment in health," Journal of Health Economics, Elsevier, Elsevier, vol. 15(3), pages 369-376, June.
  7. Johannesson, Magnus & Johansson, Per-Olov & Soderqvist, Tore, 1998. "Time spent on waiting lists for medical care: an insurance approach," Journal of Health Economics, Elsevier, Elsevier, vol. 17(5), pages 627-644, October.
  8. Neil Buckley & Katherine Cuff & Jeremiah Hurley & Logan McLeod & Robert Nuscheler & David Cameron, 2010. "Willingness-to-Pay for Parallel Private Health Insurance: Evidence from Laboratory Experiment," Centre for Health Economics and Policy Analysis Working Paper Series, Centre for Health Economics and Policy Analysis (CHEPA), McMaster University, Hamilton, Canada 2010-02, Centre for Health Economics and Policy Analysis (CHEPA), McMaster University, Hamilton, Canada.
  9. Tim Besley & John Hall & Ian Preston, 1996. "The demand for private health insurance: do waiting lists matter?," IFS Working Papers, Institute for Fiscal Studies W96/07, Institute for Fiscal Studies.
  10. San Miguel, Fernando & Ryan, Mandy & Scott, Anthony, 2002. "Are preferences stable? The case of health care," Journal of Economic Behavior & Organization, Elsevier, Elsevier, vol. 48(1), pages 1-14, May.
  11. Urs Fischbacher, 2007. "z-Tree: Zurich toolbox for ready-made economic experiments," Experimental Economics, Springer, Springer, vol. 10(2), pages 171-178, June.
  12. Pizer, Steven D. & Prentice, Julia C., 2011. "Time is money: Outpatient waiting times and health insurance choices of elderly veterans in the United States," Journal of Health Economics, Elsevier, Elsevier, vol. 30(4), pages 626-636, July.
  13. Louviere, Jordan J. & Lancsar, Emily, 2009. "Choice experiments in health: the good, the bad, the ugly and toward a brighter future," Health Economics, Policy and Law, Cambridge University Press, Cambridge University Press, vol. 4(04), pages 527-546, October.
  14. Fan, Chinn-Ping & Chen, Kong-Pin & Kan, Kamhon, 1998. "The design of payment systems for physicians under global budget - an experimental study," Journal of Economic Behavior & Organization, Elsevier, Elsevier, vol. 34(2), pages 295-311, February.
  15. Sandra Hopkins & Peter Zweifel, 2005. "The Australian Health Policy Changes of 1999 and 2000: An Evaluation," Applied Health Economics and Health Policy, Springer Healthcare | Adis, Springer Healthcare | Adis, vol. 4(4), pages 229-238.
  16. Charles A. Holt & Susan K. Laury, 2002. "Risk Aversion and Incentive Effects," American Economic Review, American Economic Association, American Economic Association, vol. 92(5), pages 1644-1655, December.
  17. Wijkander, Hans, 1988. "Equity and Efficiency in Public Sector Pricing: A Case for Stochastic Rationing," Econometrica, Econometric Society, Econometric Society, vol. 56(6), pages 1455-65, November.
  18. Mireia Jofre-Bonet, 2000. "Public health care and private insurance demand: The waiting time as a link," Health Care Management Science, Springer, Springer, vol. 3(1), pages 51-71, January.
  19. Meliyanni Johar & Glenn Jones & Michael Keane & Elizabeth Savage & Olena Stavrunova, 2011. "Waiting times for elective surgery and the decision to buy private health insurance," Health Economics, John Wiley & Sons, Ltd., John Wiley & Sons, Ltd., vol. 20(S1), pages 68-86, 09.
  20. Schram, Arthur & Sonnemans, Joep, 2011. "How individuals choose health insurance: An experimental analysis," European Economic Review, Elsevier, Elsevier, vol. 55(6), pages 799-819, August.
  21. Christoph Schwierz & Achim Wübker & Ansgar Wübker & Björn Kuchinke, 2011. "Discrimination in waiting times by insurance type and financial soundness of German acute care hospitals," The European Journal of Health Economics, Springer, Springer, vol. 12(5), pages 405-416, October.
  22. Cason, Timothy N. & Plott, Charles R., 1996. "EPA's New Emissions Trading Mechanism: A Laboratory Evaluation," Journal of Environmental Economics and Management, Elsevier, vol. 30(2), pages 133-160, March.
  23. Timothy N. Cason & Daniel Friedman, 1997. "Price Formation in Single Call Markets," Econometrica, Econometric Society, Econometric Society, vol. 65(2), pages 311-346, March.
  24. Loewenstein, George, 1999. "Experimental Economics from the Vantage-Point of Behavioural Economics," Economic Journal, Royal Economic Society, Royal Economic Society, vol. 109(453), pages F23-34, February.
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. Guidon Fenig & Mariya Mileva & Luba Petersen, 2013. "Asset Trading and Monetary Policy in Production Economies," Discussion Papers, Department of Economics, Simon Fraser University dp13-08, Department of Economics, Simon Fraser University, revised Aug 2014.

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:mcm:deptwp:2012-02. 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: ().

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.