IDEAS home Printed from https://ideas.repec.org/p/her/chewps/2006-11.html
   My bibliography  Save this paper

Do financial incentives for supplementary private health insurance reduce pressure on the public system? Evidence from Australia, CHERE Working Paper 2006/11

Author

Listed:
  • Mingshan Lu
  • Elizabeth Savage

    () (CHERE, University of Technology, Sydney)

Abstract

In many developed countries, budgetary pressures have made government investigate private insurance to reduce pressure on their public health system. Between 1997 and 2000 the Australian government implemented a series of reforms intended to increase enrollment in private health insurance and reduce public health care costs. Using the ABS 2001 National Health Survey, we examine the impact of increased insurance coverage on use of the hospital system, in particular on public and private admissions and lengths of stay. We model probability of hospital admission and length of stay for public (Medicare) and private patients. We use Propensity Score Matching to control for selection in the insurance decision and estimate a two-part model for hospital admission and length of stay on the matched sample. Our results indicate that there is selection associated with insurance choice. We also find that unconditional public patient and private patient lengths of stay in 2001 differ markedly depending on insurance duration. Those with shorter periods of insurance coverage behave more like the uninsured than those insured prior to the insurance incentives. While the insurance incentives substantially increased the proportion of the population with supplementary cover, the impact on use of the public system appears to be quite modest. Increased private usage outweighs reduced public usage and the insurance incentives appear to be an extremely costly way of reducing pressure on the public hospital system.

Suggested Citation

  • Mingshan Lu & Elizabeth Savage, 2006. "Do financial incentives for supplementary private health insurance reduce pressure on the public system? Evidence from Australia, CHERE Working Paper 2006/11," Working Papers 2006/11, CHERE, University of Technology, Sydney.
  • Handle: RePEc:her:chewps:2006/11
    as

    Download full text from publisher

    File URL: http://www.chere.uts.edu.au/pdf/wp2006_11.pdf
    File Function: First version, August 2006
    Download Restriction: no

    References listed on IDEAS

    as
    1. Shen, Yu-Chu, 2002. "The effect of hospital ownership choice on patient outcomes after treatment for acute myocardial infarction," Journal of Health Economics, Elsevier, vol. 21(5), pages 901-922, September.
    2. Duan, Naihua, et al, 1984. "Choosing between the Sample-Selection Model and the Multi-part Model," Journal of Business & Economic Statistics, American Statistical Association, vol. 2(3), pages 283-289, July.
    3. Duan, Naihua, et al, 1983. "A Comparison of Alternative Models for the Demand for Medical Care," Journal of Business & Economic Statistics, American Statistical Association, vol. 1(2), pages 115-126, April.
    4. Colm Harmon & Brian Nolan, 2001. "Health insurance and health services utilization in Ireland," Health Economics, John Wiley & Sons, Ltd., vol. 10(2), pages 135-145.
    Full references (including those not matched with items on IDEAS)

    Citations

    Blog mentions

    As found by EconAcademics.org, the blog aggregator for Economics research:
    1. Things you should know about private health insurance rebates
      by Anthony Harris, Director of the Centre for Health Economics at Monash University in The Conversation on 2013-07-01 09:45:45

    Citations

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


    Cited by:

    1. Stephanie Knox & Elizabeth Savage & Denzil Fiebig & Vineta Salale, 2007. "Joiners, leavers, stayers and abstainers: Private health insurance choices in Australia, CHERE Working Paper 2007/8," Working Papers 2007/8, CHERE, University of Technology, Sydney.
    2. Nathan Kettlewell, 2016. "Utilisation and Selection in an Ancillaries Health Insurance Market," Discussion Papers 2016-17, School of Economics, The University of New South Wales.
    3. 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.
    4. Damien S. Eldridge & Ilke Onur & Malathi Velamuri, 2017. "The impact of private hospital insurance on the utilization of hospital care in Australia," Applied Economics, Taylor & Francis Journals, vol. 49(1), pages 78-95, January.

    More about this item

    Keywords

    Private Health Insurance; Australia;

    JEL classification:

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

    NEP fields

    This paper has been announced in the following NEP Reports:

    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:her:chewps:2006/11. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Liz Chinchen). General contact details of provider: http://edirc.repec.org/data/chusyau.html .

    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.

    If CitEc recognized a reference but did not link an item in RePEc to it, you can help with 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.

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

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.