IDEAS home Printed from https://ideas.repec.org/a/ucp/amjhec/v1y2015i2p125-164.html
   My bibliography  Save this article

Does Health Insurance Encourage or Crowd Out Beneficial Nonmedical Care? A Dynamic Analysis of Insurance, Health Inputs, and Health Production

Author

Listed:
  • Betty Tao Fout

    (Abt Associates, Bethesda, MA)

  • Donna B. Gilleskie

    (University of North Carolina at Chapel Hill)

Abstract

Determination of evidence-based best practice guidelines and evaluation of medical and nonmedical determinants of health requires modeling of consumer demand as well as health production. Toward this end, we examine the impact of endogenous health insurance coverage, which creates variation in the prices of medical care across individuals as well as a change in the relative price of nonmedical health inputs. Specifically, we analyze the decisions of individuals with diabetes to monitor, treat, and manage their condition and their subsequent health outcomes. Diabetics can experience serious or fatal complications without regular monitoring (of blood glucose and other indicators of disease severity) and, in some cases, prescription medication. These activities can present a significant financial burden that could be substantially attenuated by health insurance. Through cross-price effects, insurance may also influence important nonmedical input choices such as exercise and diet. Using a sample of nonelderly diabetics from the Medical Expenditure Panel Survey, we jointly estimate demand equations for health insurance, medical treatment, lifestyle decisions, and health, controlling for their common unobserved determinants. We find that insurance with drug coverage leads to better adherence to diabetic care guidelines. There is, however, some evidence of ex ante moral hazard: those covered by insurance with a drug plan show slightly lower probabilities of exercising regularly.

Suggested Citation

  • Betty Tao Fout & Donna B. Gilleskie, 2015. "Does Health Insurance Encourage or Crowd Out Beneficial Nonmedical Care? A Dynamic Analysis of Insurance, Health Inputs, and Health Production," American Journal of Health Economics, University of Chicago Press, vol. 1(2), pages 125-164, Spring.
  • Handle: RePEc:ucp:amjhec:v:1:y:2015:i:2:p:125-164
    as

    Download full text from publisher

    File URL: https://www.journals.uchicago.edu/doi/pdf/10.1162/AJHE_a_00010
    File Function: link to full text PDF
    Download Restriction: Access to the online full text or PDF requires a subscription.
    ---><---

    As the access to this document is restricted, you may want to look for a different version below or search for a different version of it.

    Other versions of this item:

    Citations

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


    Cited by:

    1. Donna B. Gilleskie, 2021. "In sickness and in health, until death do us part: A case for theory," Southern Economic Journal, John Wiley & Sons, vol. 87(3), pages 753-768, January.
    2. Marcela Parada-Contzen, 2020. "Crowding-out in savings decisions, portfolio default adoption and home ownership: evidence from the Chilean retirement system," Review of Economics of the Household, Springer, vol. 18(2), pages 543-569, June.

    More about this item

    Keywords

    health; diabetes; health economics; health policy; health insurance; health behaviors; health care.;
    All these keywords.

    JEL classification:

    • I10 - Health, Education, and Welfare - - Health - - - General
    • I13 - Health, Education, and Welfare - - Health - - - Health Insurance, Public and Private

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:ucp:amjhec:v:1:y:2015:i:2:p:125-164. See general information about how to correct material in RePEc.

    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.

    We have no bibliographic references for this item. You can help adding them by using 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 RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Journals Division (email available below). General contact details of provider: https://www.journals.uchicago.edu/AJHE .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.