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Effects of universal health insurance on health care utilization, and supply-side responses: Evidence from Japan

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  • Kondo, Ayako
  • Shigeoka, Hitoshi

Abstract

We investigate the effects of a massive expansion in health insurance coverage on health care utilization and supply-side responses, by focusing on universal health insurance introduced in Japan in 1961. There are two major findings. First, health care utilization (measured in terms of admissions, inpatient days, and outpatient visits to hospitals) increased significantly. Second, we also find a supply response but the size of the supply response differs across service types: while the number of beds increases, effects on the number of medical institutions, physicians, and nurses are either negligible or inconclusive. Our results suggest that countries planning a large expansion in health insurance coverage would need to generate sufficient financial resources to cover the surge in health care expenditures, both in the short and long run. Our results also indicate that any slowdown in the supply-side response may constrain the ability of the health care system to meet increased demand.

Suggested Citation

  • Kondo, Ayako & Shigeoka, Hitoshi, 2013. "Effects of universal health insurance on health care utilization, and supply-side responses: Evidence from Japan," Journal of Public Economics, Elsevier, vol. 99(C), pages 1-23.
  • Handle: RePEc:eee:pubeco:v:99:y:2013:i:c:p:1-23
    DOI: 10.1016/j.jpubeco.2012.12.004
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    2. Courtemanche, Charles & Friedson, Andrew I. & Koller, Andrew P. & Rees, Daniel I., 2017. "The Affordable Care Act and Ambulance Response Times," IZA Discussion Papers 10951, Institute for the Study of Labor (IZA).
    3. Dang, Thang, 2017. "Does the More Educated Utilize More Health Care Services? Evidence from Vietnam Using a Regression Discontinuity Design," MPRA Paper 77641, University Library of Munich, Germany.
    4. Galina Besstremyannaya, 2014. "The adverse effects of value-based purchasing in health care: dynamic quantile regression with endogeneity," Discussion Papers 14-006, Stanford Institute for Economic Policy Research.
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    6. Midori Matsushima & Hiroyuki Yamada & Yasuharu Shimamura, 2016. "Analysis on Demand and Supply-side Responses during the Expansion of Health Insurance Coverage in Vietnam: Challenges and Policy Implications toward Universal Health Coverage," Keio-IES Discussion Paper Series 2016-013, Institute for Economics Studies, Keio University.
    7. Cesur, Resul & Güneş, Pınar Mine & Tekin, Erdal & Ulker, Aydogan, 2017. "The value of socialized medicine: The impact of universal primary healthcare provision on mortality rates in Turkey," Journal of Public Economics, Elsevier, vol. 150(C), pages 75-93.
    8. Diether Beuermann & Camilo Pecha, 2016. "Healthy to Work: The Impact of Free Public Healthcare on Health Status and Labor Supply in Jamaica," IDB Publications (Working Papers) 96656, Inter-American Development Bank.
    9. Supon Limwattananon & Sven Neelsen & Owen O'Donnell & Phusit Prakongsai & Viroj Tangcharoensathien & Eddy van Doorslaer & Vuthiphan Vongmongkol, 2013. "Universal Coverage on a Budget: Impacts on Health Care Utilization and Out-Of-Pocket Expenditures in Thailand," CESifo Working Paper Series 4262, CESifo Group Munich.
    10. Galina Besstremyannaya, 2015. "Heterogeneous effect of residency matching and prospective payment on labor returns and hospital scale economies," Discussion Papers 15-001, Stanford Institute for Economic Policy Research.
    11. HSU Minchung & YAMADA Tomoaki, 2017. "Population Aging, Health Care, and Fiscal Policy Reform: The challenges for Japan," Discussion papers 17038, Research Institute of Economy, Trade and Industry (RIETI).
    12. Yiqiu, Wang & Maria, Porter & Songqing, Jin, 2016. "Estimating Effects of Health Insurance Coverage on Medical Service Utilization and Health in Rural China," 2016 Annual Meeting, July 31-August 2, 2016, Boston, Massachusetts 235470, Agricultural and Applied Economics Association.
    13. Adam Wagstaff & Daniel Cotlear & Patrick Hoang-Vu Eozenou & Leander R. Buisman, 2016. "Measuring progress towards universal health coverage: with an application to 24 developing countries," Oxford Review of Economic Policy, Oxford University Press, vol. 32(1), pages 147-189.
    14. Cesur, Resul & Güne?, P?nar Mine & Tekin, Erdal & Ulker, Aydogan, 2015. "The Value of Socialized Medicine: The Impact of Universal Primary Healthcare Provision on Birth and Mortality Rates in Turkey," IZA Discussion Papers 9329, Institute for the Study of Labor (IZA).
    15. Barnes, Kayleigh & Mukherji, Arnab & Mullen, Patrick & Sood, Neeraj, 2017. "Financial risk protection from social health insurance," Journal of Health Economics, Elsevier, vol. 55(C), pages 14-29.
    16. Galina Besstremyannaya, 2014. "Heterogeneous effect of coinsurance rate on healthcare costs: generalized finite mixtures and matching estimators," Discussion Papers 14-014, Stanford Institute for Economic Policy Research.
    17. Galina Besstremyannaya, 2015. "The adverse effects of incentives regulation in health care: a comparative analysis with the U.S. and Japanese hospital data," Working Papers w0218, Center for Economic and Financial Research (CEFIR).
    18. Limwattananon, Supon & Neelsen, Sven & O'Donnell, Owen & Prakongsai, Phusit & Tangcharoensathien, Viroj & van Doorslaer, Eddy & Vongmongkol, Vuthiphan, 2015. "Universal coverage with supply-side reform: The impact on medical expenditure risk and utilization in Thailand," Journal of Public Economics, Elsevier, vol. 121(C), pages 79-94.

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