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Health insurance impacts on health and nonmedical consumption in a developing country

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Author Info
Wagstaff, Adam
Pradhan, Menno

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Abstract

The authors examine the effects of the introduction of Vietnam's health insurance (VHI) program on health outcomes, health care utilization, and non-medical household consumption. The use of panel data collected before and after the insurance program's introduction allows them to eliminate any confounding effects due to selection on time-invariant un-observables, and their coupling of propensity score matching with a double-difference estimator allows them to reduce the risk of biases due to inappropriate specification of the outcome regression model. The authors'results suggest that Vietnam's health insurance program impacted favorably on height-for-age and weight-for-age of young school children, and on body mass index among adults. Their results suggest that among young children, VHI increases use of primary care facilities and leads to a substitution away from the use of pharmacists as a source of advice and non-prescribed medicines toward the use of them as a supplier of medicines prescribed by a health professional. Among older children and adults, VHI results in a marked increase in the use of hospital inpatient and outpatient departments. The results also suggest that VHI causes a reduction in annual out-of-pocket expenditures on health and an increase in non-medical household consumption, including food consumption, but mostly nonfood consumption. The authors'estimate of the VHI-induced reduction in out-of-pocket health spending is considerably smaller than their estimate of the VHI-induced increase in non-medical consumption, which is consistent with the idea that households hold back their consumption considerably if, through lack of health insurance, they are exposed to the risk of large out-of-pocket expenditures. This is especially plausible in a country where at the time (1993), a single visit to a public hospital cost on average the equivalent of 20 percent of a person's annual nonfood consumption.

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Paper provided by The World Bank in its series Policy Research Working Paper Series with number 3563.

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Date of creation: 01 Apr 2005
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Handle: RePEc:wbk:wbrwps:3563

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Keywords: Health Monitoring&Evaluation Health Economics&Finance Environmental Economics&Policies Insurance&Risk Mitigation Health Systems Development&Reform

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  1. Currie, Janet & Gruber, Jonathan, 1996. "Health Insurance Eligibility, Utilization of Medical Care, and Child Health," The Quarterly Journal of Economics, MIT Press, vol. 111(2), pages 431-66, May. [Downloadable!] (restricted)
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  2. Matthew Jowett, 2003. "Do informal risk sharing networks crowd out public voluntary health insurance? Evidence from Vietnam," Applied Economics, Taylor and Francis Journals, vol. 35(10), pages 1153-1161, January. [Downloadable!] (restricted)
  3. Manning, Willard G. & Marquis, M. Susan, 1996. "Health insurance: The tradeoff between risk pooling and moral hazard," Journal of Health Economics, Elsevier, vol. 15(5), pages 609-639, October. [Downloadable!] (restricted)
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  6. Janet Currie & Jonathan Gruber, 1997. "The Technology of Birth: Health Insurance, Medical Interventions, and Infant Health," NBER Working Papers 5985, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
  7. Currie, Janet & Gruber, Jonathan, 1996. "Saving Babies: The Efficacy and Cost of Recent Changes in the Medicaid Eligibility of Pregnant Women," Journal of Political Economy, University of Chicago Press, vol. 104(6), pages 1263-96, December. [Downloadable!] (restricted)
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  11. David M. Cutler & Richard J. Zeckhauser, 1999. "The Anatomy of Health Insurance," NBER Working Papers 7176, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
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  12. Richard Blundell & Monica Costa Dias, 2000. "Evaluation methods for non-experimental data," Fiscal Studies, Institute for Fiscal Studies, vol. 21(4), pages 427-468, January. [Downloadable!]
  13. Behrman, Jere R. & Hoddinott, John, 2001. "An evaluation of the impact of PROGRESA on pre-school child height," FCND briefs 104, International Food Policy Research Institute (IFPRI). [Downloadable!]
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  14. Menno Pradhan & Laura B. Rawlings, 2002. "The Impact and Targeting of Social Infrastructure Investments: Lessons from the Nicaraguan Social Fund," World Bank Economic Review, Oxford University Press, vol. 16(2), pages 275-295, August.
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  17. Jalan, Jyotsna & Ravallion, Martin, 2001. "Behavioral responses to risk in rural China," Journal of Development Economics, Elsevier, vol. 66(1), pages 23-49, October. [Downloadable!] (restricted)
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  18. Colm Harmon & Brian Nolan, 2001. "Health insurance and health services utilization in Ireland," Health Economics, John Wiley & Sons, Ltd., vol. 10(2), pages 135-145. [Downloadable!]
  19. Feldstein, Martin S, 1973. "The Welfare Loss of Excess Health Insurance," Journal of Political Economy, University of Chicago Press, vol. 81(2), pages 251-80, Part I, M. [Downloadable!] (restricted)
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  22. Sapelli, Claudio & Vial, Bernardita, 2003. "Self-selection and moral hazard in Chilean health insurance," Journal of Health Economics, Elsevier, vol. 22(3), pages 459-476, May. [Downloadable!] (restricted)
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  23. Guido W. Imbens, 2004. "Nonparametric Estimation of Average Treatment Effects Under Exogeneity: A Review," The Review of Economics and Statistics, MIT Press, vol. 86(1), pages 4-29, 06. [Downloadable!] (restricted)
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  24. Chou, Shin-Yi & Liu, Jin-Tan & Hammitt, James K., 2003. "National Health Insurance and precautionary saving: evidence from Taiwan," Journal of Public Economics, Elsevier, vol. 87(9-10), pages 1873-1894, September. [Downloadable!] (restricted)
  25. Bloom, Gerald, 1998. "Primary health care meets the market in China and Vietnam," Health Policy, Elsevier, vol. 44(3), pages 233-252, June. [Downloadable!] (restricted)
  26. Antonio J. Trujillo, 2003. "Medical care use and selection in a social health insurance with an equalization fund: evidence from Colombia," Health Economics, John Wiley & Sons, Ltd., vol. 12(3), pages 231-246. [Downloadable!]
Full references

Cited by:
(explanations, 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.)

  1. Blanchard, Olivier J & Giavazzi, Francesco, 2006. "Rebalancing Growth in China: A Three-Handed Approach," CEPR Discussion Papers 5403, C.E.P.R. Discussion Papers. [Downloadable!] (restricted)
    Other versions:
  2. Wagstaff, Adam & Lindelow, Magnus & Gao Jun & Xu Ling & Qian Juncheng, 2007. "Extending health insurance to the rural population : an impact evaluation of China ' s new cooperative medical scheme," Policy Research Working Paper Series 4150, The World Bank. [Downloadable!]
  3. Wagstaff, Adam, 2007. "Health insurance for the poor : initial impacts of Vietnam ' s health care fund for the poor," Policy Research Working Paper Series 4134, The World Bank. [Downloadable!]
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