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A dynamic analysis of the demand for health insurance and health care

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  • Bolhaar, Jonneke
  • Lindeboom, Maarten
  • van der Klaauw, Bas

Abstract

We find that asymmetric information is important for the uptake of supplementary private health insurance and health care utilization. We use dynamic panel data models to investigate the sources of asymmetric information and distinguish short-run selection effects into insurance from long-run selection effects. Short-run selection effects (i.e. responses to shocks) are adverse, but small in size. Also long-run effects driven by differences in, for example, preferences and risk aversion, are small. But we find some evidence for multidimensional asymmetric information. For example, mental health causes advantageous selection. Estimates of health care utilization models suggest that moral hazard is not important.

Suggested Citation

  • Bolhaar, Jonneke & Lindeboom, Maarten & van der Klaauw, Bas, 2012. "A dynamic analysis of the demand for health insurance and health care," European Economic Review, Elsevier, vol. 56(4), pages 669-690.
  • Handle: RePEc:eee:eecrev:v:56:y:2012:i:4:p:669-690
    DOI: 10.1016/j.euroecorev.2012.03.002
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    Cited by:

    1. Daniele Fabbri & Chiara Monfardini, 2016. "Opt Out or Top Up? Voluntary Health Care Insurance and the Public vs. Private Substitution," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 78(1), pages 75-93, February.
    2. Iwona Laskowska, 2015. "Private health insurance and the problem of moral hazard (Prywatne ubezpieczenia zdrowotne a problem pokusy naduzycia)," Problemy Zarzadzania, University of Warsaw, Faculty of Management, vol. 13(53), pages 58-68.
    3. Woldemichael, Andinet & Gurara, Daniel Zerfu & Shimeles, Abebe, 2016. "Community-Based Health Insurance and Out-of-Pocket Healthcare Spending in Africa: Evidence from Rwanda," IZA Discussion Papers 9922, Institute for the Study of Labor (IZA).
    4. Renate Lange & Jörg Schiller & Petra Steinorth, 2015. "Demand and Selection Effects in Supplemental Health Insurance in Germany," SOEPpapers on Multidisciplinary Panel Data Research 757, DIW Berlin, The German Socio-Economic Panel (SOEP).
    5. Renate Lange & Jörg Schiller & Petra Steinorth, 2017. "Demand and Selection Effects in Supplemental Health Insurance in Germany," The Geneva Papers on Risk and Insurance - Issues and Practice, Palgrave Macmillan;The Geneva Association, vol. 42(1), pages 5-30, January.
    6. repec:bla:jrinsu:v:84:y:2017:i:1:p:35-72 is not listed on IDEAS
    7. Doiron, Denise & Fiebig, Denzil G. & Suziedelyte, Agne, 2014. "Hips and hearts: The variation in incentive effects of insurance across hospital procedures," Journal of Health Economics, Elsevier, vol. 37(C), pages 81-97.
    8. Johar, Meliyanni & Savage, Elizabeth, 2012. "Sources of advantageous selection: Evidence using actual health expenditure risk," Economics Letters, Elsevier, vol. 116(3), pages 579-582.
    9. Carine Franc & Marc Perronnin & Aurelie Pierre, 2014. "Supplemental Health Insurance and Healthcare Consumption: A Dynamic Approach to Moral Hazard," Working Papers DT58, IRDES institut for research and information in health economics, revised Jan 2014.
    10. Kiil, Astrid, 2012. "Private health insurance and the use of health care services - a review of the theoretical literature with application to voluntary private health insurance in universal health care systems," COHERE Working Paper 2012:1, University of Southern Denmark, COHERE - Centre of Health Economics Research.
    11. repec:kap:ijhcfe:v:17:y:2017:i:1:d:10.1007_s10754-016-9195-3 is not listed on IDEAS
    12. Valerie Albouy & Laurent Davezies & Thierry Debrand, 2009. "Dynamic Estimation of Health Expenditure: A new approach for simulating individual expenditure," Working Papers DT20, IRDES institut for research and information in health economics, revised Jan 2009.
    13. Jeon, Boyoung & Kwon, Soonman, 2013. "Effect of private health insurance on health care utilization in a universal public insurance system: A case of South Korea," Health Policy, Elsevier, vol. 113(1), pages 69-76.
    14. Perronnin, Marc, 2013. "Effet de l'assurance complémentaire santé sur les consommations médicales, entre risque moral et amélioration de l'accès aux soins," Economics Thesis from University Paris Dauphine, Paris Dauphine University, number 123456789/13659 edited by Wittwer, Jérôme, December.
    15. Sofia Vaz & Pedro Ramos, 2016. "Where did civil servants go? the effect of an increase in public co-payments on double insured patients," Health Economics Review, Springer, vol. 6(1), pages 1-8, December.

    More about this item

    Keywords

    Supplementary private health insurance; Health care utilization; Asymmetric information; Moral hazard; Panel data;

    JEL classification:

    • I11 - Health, Education, and Welfare - - Health - - - Analysis of Health Care Markets
    • D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information; Mechanism Design
    • G22 - Financial Economics - - Financial Institutions and Services - - - Insurance; Insurance Companies; Actuarial Studies
    • C33 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Models with Panel Data; Spatio-temporal Models

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