IDEAS home Printed from https://ideas.repec.org/p/tse/wpaper/31080.html
   My bibliography  Save this paper

Supplementary health insurance in the Colombian managed care system: Adverse or advantageous selection?

Author

Listed:
  • Bardey, David
  • Buitrago, Giancarlo

Abstract

The aim of this article is to estimate the type of selection that exists in the voluntary health insurance market in Colombia where the compulsory coverage is implemented through a managed care competition. We build a panel database that combines individuals’ information from the Ministry of Health and a database provided by two private health insurers. We perform the correlation test for health expenditure and coverage. Following Fang et al. (2008), we condition the estimation on health controls that are available to the econometrician but not to insurers. In both cases we obtain a positive correlation, suggesting that adverse selection predominates. In order to rule out some moral hazard effects, we estimate the correlation between previous health service consumption and insurance purchase. The positive correlation obtained is robust to the inclusion of controls for diagnosis, suggesting that despite some risk selection strategies, health insurers are not protected from adverse selection.

Suggested Citation

  • Bardey, David & Buitrago, Giancarlo, 2016. "Supplementary health insurance in the Colombian managed care system: Adverse or advantageous selection?," TSE Working Papers 16-709, Toulouse School of Economics (TSE).
  • Handle: RePEc:tse:wpaper:31080
    as

    Download full text from publisher

    File URL: http://www.tse-fr.eu/sites/default/files/TSE/documents/doc/wp/2016/wp_tse_709.pdf
    File Function: Full text
    Download Restriction: no

    Other versions of this item:

    References listed on IDEAS

    as
    1. Liran Einav & Amy Finkelstein & Stephen P. Ryan & Paul Schrimpf & Mark R. Cullen, 2013. "Selection on Moral Hazard in Health Insurance," American Economic Review, American Economic Association, vol. 103(1), pages 178-219, February.
    2. de Meza, David & Webb, David C, 2001. "Advantageous Selection in Insurance Markets," RAND Journal of Economics, The RAND Corporation, vol. 32(2), pages 249-262, Summer.
    3. Blomqvist, Ake, 1997. "Optimal non-linear health insurance," Journal of Health Economics, Elsevier, vol. 16(3), pages 303-321, June.
    4. 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, April.
    5. Buitrago, Giancarlo & Bardey, David, 2015. "Voluntary Health Plan Subsidies and Public Expenditure," Documentos CEDE Series 212854, Universidad de Los Andes, Economics Department.
    6. Liran Einav & Amy Finkelstein, 2011. "Selection in Insurance Markets: Theory and Empirics in Pictures," Journal of Economic Perspectives, American Economic Association, vol. 25(1), pages 115-138, Winter.
    7. Marcelo Resende & Rodrigo Zeidan, 2010. "Adverse selection in the health insurance market: some empirical evidence," The European Journal of Health Economics, Springer;Deutsche Gesellschaft für Gesundheitsökonomie (DGGÖ), vol. 11(4), pages 413-418, August.
    8. Alma Cohen, 2005. "Asymmetric Information and Learning: Evidence from the Automobile Insurance Market," The Review of Economics and Statistics, MIT Press, vol. 87(2), pages 197-207, May.
    Full references (including those not matched with items on IDEAS)

    Citations

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


    Cited by:

    1. Catalina Gutiérrez S. & Nicolás Gómez, 2018. "El sistema de salud colombiano en las próximas décadas: cómo avanzar hacia la sostenibilidad y la calidad en la atención," Cuadernos de Fedesarrollo 016251, Fedesarrollo.

    More about this item

    Keywords

    Information asymmetry; Health insurance; Adverse Selection; Correlation test;

    JEL classification:

    • D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information; Mechanism Design
    • G22 - Financial Economics - - Financial Institutions and Services - - - Insurance; Insurance Companies; Actuarial Studies
    • I13 - Health, Education, and Welfare - - Health - - - Health Insurance, Public and Private

    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:tse:wpaper:31080. 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: (). General contact details of provider: http://edirc.repec.org/data/tsetofr.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.