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The Effect of Health Insurance on the Substitution between Public and Private Hospital Care

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  • Denise Doiron
  • Nathan Kettlewell

Abstract

Researchers have long been interested in estimating the causal effect of health insurance on health†care utilisation. Less attention has been given to measuring the impact of insurance on the substitution between private and public sector care. We estimate this effect for hospital admissions in Australia. To identify causal effects we use household variables as instruments, namely, information on partner's health and family aspirations. We find that having private health insurance increases the probability of a hospital admission by 5–6 percentage points. This net effect is the result of a considerable substitution from public to private care, which has important policy implications.

Suggested Citation

  • Denise Doiron & Nathan Kettlewell, 2018. "The Effect of Health Insurance on the Substitution between Public and Private Hospital Care," The Economic Record, The Economic Society of Australia, vol. 94(305), pages 135-154, June.
  • Handle: RePEc:bla:ecorec:v:94:y:2018:i:305:p:135-154
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    File URL: https://doi.org/10.1111/1475-4932.12394
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    References listed on IDEAS

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    Cited by:

    1. Doiron, Denise & Kettlewell, Nathan, 2018. "Family formation and demand for health insurance," Working Papers 2018-08, University of Sydney, School of Economics.

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