The Impact of Private Hospital Insurance on Utilization of Hospital Care in Australia: Evidence from the National Health Survey
AbstractWe use the 2004-'05 wave of the Australian National Health Survey to estimate the impact of private hospital insurance on the utilization of hospital care services in Australia. We employ the two-stage residual inclusion approach (2SRI) to account for the endogeneity of supplementary private hospital insurance purchases. Health care consumption is measured by two variables: hospitalization, and the number of nights spent in hospital. We apply a negative binomial type II model to estimate the utilization of hospital services. We calculate moral hazard based on a difference-of-means estimator. Our three-stage estimation framework provides evidence of selection into private hospital insurance in Australia. We find strong evidence of moral hazard when we treat private hospital insurance as exogenous. After controlling for the endogeneity of hospital insurance, we find strong and robust evidence of substitution from public to private hospital care but no evidence of ex-post moral hazard in the number of nights spent in hospital.
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Bibliographic InfoPaper provided by School of Economics, La Trobe University in its series Working Papers with number 2011.01.
Length: 44 pages
Date of creation: Jan 2011
Date of revision: Jan 2011
Health Insurance; Health Care Consumption; Moral Hazard;
Other versions of this item:
- Eldridge, Damien & Koç, Cagatay & Onur, Ilke & Velamuri, Malathi, 2011. "The impact of private hospital insurance on utilization of hospital care in Australia: Evidence from the national health survey," Working Paper Series 1674, Victoria University of Wellington, School of Economics and Finance.
- I11 - Health, Education, and Welfare - - Health - - - Analysis of Health Care Markets
- I18 - Health, Education, and Welfare - - Health - - - Government Policy; Regulation; Public Health
- C35 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Discrete Regression and Qualitative Choice Models; Discrete Regressors; Proportions
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