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Health insurance and health care utilization: Theory and evidence from Australia 1989-90, CHERE Discussion Paper No 44

Author

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  • Elizabeth Savage

    (CHERE, University of Technology, Sydney)

Abstract

The Australian hospital system is characterised by the co-existence of private hospitals, where individuals pay for services and public hospitals, where services are free to all but delivered after a waiting time. The decision to purchase insurance for private hospital treatment depends on the trade-off between price of treatment, waiting time and the insurance premium. Clearly the potential for adverse selection and moral hazard exists. When the endogeneity of the insurance decision is accounted for, the extent of moral hazard can be substantial increasing the expected length of a hospital stay by a factor of up to three.

Suggested Citation

  • Elizabeth Savage, 2001. "Health insurance and health care utilization: Theory and evidence from Australia 1989-90, CHERE Discussion Paper No 44," Discussion Papers 44, CHERE, University of Technology, Sydney.
    • Handle: RePEc:her:chedps:44
    as

    Download full text from publisher

    File URL: http://www.chere.uts.edu.au/pdf/dp44.pdf
    File Function: First version, 2001
    Download Restriction: no
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    Cited by:

    1. Bhat Ramesh & Jain Nishant, 2007. "A Study of Factors Affecting the Renewal of Health Insurance Policy," IIMA Working Papers WP2007-01-02, Indian Institute of Management Ahmedabad, Research and Publication Department.

    More about this item

    Keywords

    health insurance; hospitals; moral hazard; Australia;
    All these keywords.

    JEL classification:

    • I11 - Health, Education, and Welfare - - Health - - - Analysis of Health Care Markets

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