Waiting times and the decision to buy private health insurance. CHERE Working Paper 2010/9
Over 45% of Australians buy health insurance for private treatment in hospital. This is despite having access to universal and free public hospital treatment. Anecdotal evidence suggests that one possible explanation for the high rate of insurance coverage is to avoid long waiting times for public hospital treatment. In this study, we investigate the effect of expected waiting time on individual decisions to buy private health insurance. Individuals are assumed to form an expectation of their own waiting time as a function of their demographics and health status. We estimate models of expected waiting time using administrative data on the population hospitalised for elective procedures in public hospitals in 2004-05 and use the parameter estimates to impute expected waiting times for individuals in a representative sample of the population. We model the impact of expected waiting time on the decision to purchase private health insurance. In the insurance demand model, cross-sample predictions are adjusted by the individuals? probability of hospital admission. We find that expected waiting time does not increase the probability of buying insurance but a high probability of experiencing a long wait does. Overall we find there is no significant impact of waiting time on insurance purchase. In addition, we find that the inclusion of individual waiting time variables removes the evidence for favourable selection into private insurance, as measured by self-assessed health. This result suggests that a source of the favourable selection by reported health status may be aversion to long waits among healthier people.
|Date of creation:||May 2010|
|Contact details of provider:|| Postal: Level 4, 645 Harris Street, Ultimo, NSW 2007|
Phone: +61 2 9514 9799
Fax: 61 2 9514 4730
Web page: http://www.chere.uts.edu.au
More information through EDIRC
References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Johannesson, Magnus & Johansson, Per-Olov & Soderqvist, Tore, 1998.
"Time spent on waiting lists for medical care: an insurance approach,"
Journal of Health Economics,
Elsevier, vol. 17(5), pages 627-644, October.
- Johannesson, Magnus & Johansson, Per-Olov & Söderqvist, Tore, 1997. "Time Spent on Waiting Lists for Medical Care: An Insurance Approach," SSE/EFI Working Paper Series in Economics and Finance 192, Stockholm School of Economics.
- Denise Doiron & Glenn Jones & Elizabeth Savage, 2008. "Healthy, wealthy and insured? The role of self-assessed health in the demand for private health insurance," Health Economics, John Wiley & Sons, Ltd., vol. 17(3), pages 317-334.
- Mireia Jofre-Bonet, 2000. "Public health care and private insurance demand: The waiting time as a link," Health Care Management Science, Springer, vol. 3(1), pages 51-71, January.
- Hanming Fang & Michael P. Keane & Dan Silverman, 2008. "Sources of Advantageous Selection: Evidence from the Medigap Insurance Market," Journal of Political Economy, University of Chicago Press, vol. 116(2), pages 303-350, 04.
- Hanming Fang & Michael P. Keane & Dan Silverman, 2006. "Sources of Advantageous Selection: Evidence from the Medigap Insurance Market," NBER Working Papers 12289, National Bureau of Economic Research, Inc.
- Fang, Hanming & Keane, Michael & Silverman, Dan, 2006. "Sources of Advantageous Selection: Evidence from the Medigap Insurance Market," Working Papers 17, Yale University, Department of Economics.
- Savage, Elizabeth & Wright, Donald J., 2003. "Moral hazard and adverse selection in Australian private hospitals: 1989-1990," Journal of Health Economics, Elsevier, vol. 22(3), pages 331-359, May.
- Joan Costa-Font & Montserrat Font-Vilalta, 2004. "Preference for National Health Service Use and the Demand for Private Health Insurance in Spain," The Geneva Papers on Risk and Insurance, The International Association for the Study of Insurance Economics, vol. 29(4), pages 705-718, October.
- Joan Costa-Font & Montserrat Font-Vilalta, 2004. "Preference for National Health Service Use and the Demand for Private Health Insurance in Spain," The Geneva Papers on Risk and Insurance - Issues and Practice, Palgrave Macmillan;The Geneva Association, vol. 29(4), pages 705-718, October.
- Joan Costa & Jaume Garcia, 2003. "Demand for private health insurance: how important is the quality gap?," Health Economics, John Wiley & Sons, Ltd., vol. 12(7), pages 587-599.
- Randall P. Ellis & Elizabeth Savage, 2008. "Run for Cover Now or Later? The impact of premiums, threats and deadlines on supplementary private health insurance in Australia," Boston University - Department of Economics - Working Papers Series wp2008-013, Boston University - Department of Economics.
- Thomas C. Buchmueller & Agnes Couffinhal, 2004. "Private Health Insurance in France," OECD Health Working Papers 12, OECD Publishing.
- Denzil Fiebig & Elizabeth Savage & Rosalie Viney, 2006. "Does the reason for buying health insurance influence behaviour? CHERE Working Paper 2006/1," Working Papers 2006/1, CHERE, University of Technology, Sydney.
- 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.
- Carol Propper, 1987. "An econometric estimation of the demand for private health insurance," Working Papers 024chedp, Centre for Health Economics, University of York. Full references (including those not matched with items on IDEAS)
When requesting a correction, please mention this item's handle: RePEc:her:chewps:2010/9. 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)
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 references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link 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 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.