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Health insurance impacts on health and nonmedical consumption in a developing country

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  • Wagstaff, Adam
  • Pradhan, Menno

Abstract

The authors examine the effects of the introduction of Vietnam's health insurance (VHI) program on health outcomes, health care utilization, and non-medical household consumption. The use of panel data collected before and after the insurance program's introduction allows them to eliminate any confounding effects due to selection on time-invariant un-observables, and their coupling of propensity score matching with a double-difference estimator allows them to reduce the risk of biases due to inappropriate specification of the outcome regression model. The authors'results suggest that Vietnam's health insurance program impacted favorably on height-for-age and weight-for-age of young school children, and on body mass index among adults. Their results suggest that among young children, VHI increases use of primary care facilities and leads to a substitution away from the use of pharmacists as a source of advice and non-prescribed medicines toward the use of them as a supplier of medicines prescribed by a health professional. Among older children and adults, VHI results in a marked increase in the use of hospital inpatient and outpatient departments. The results also suggest that VHI causes a reduction in annual out-of-pocket expenditures on health and an increase in non-medical household consumption, including food consumption, but mostly nonfood consumption. The authors'estimate of the VHI-induced reduction in out-of-pocket health spending is considerably smaller than their estimate of the VHI-induced increase in non-medical consumption, which is consistent with the idea that households hold back their consumption considerably if, through lack of health insurance, they are exposed to the risk of large out-of-pocket expenditures. This is especially plausible in a country where at the time (1993), a single visit to a public hospital cost on average the equivalent of 20 percent of a person's annual nonfood consumption.

Suggested Citation

  • Wagstaff, Adam & Pradhan, Menno, 2005. "Health insurance impacts on health and nonmedical consumption in a developing country," Policy Research Working Paper Series 3563, The World Bank.
  • Handle: RePEc:wbk:wbrwps:3563
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    Cited by:

    1. Hong Wang & Winnie Yip & Licheng Zhang & William C. Hsiao, 2009. "The impact of rural mutual health care on health status: evaluation of a social experiment in rural China," Health Economics, John Wiley & Sons, Ltd., vol. 18(S2), pages 65-82, July.
    2. Liu, Kai, 2016. "Insuring against health shocks: Health insurance and household choices," Journal of Health Economics, Elsevier, vol. 46(C), pages 16-32.
    3. repec:bla:ecorec:v:93:y:2017:i:302:p:484-500 is not listed on IDEAS
    4. Menon, Nidhiya & van der Meulen Rodgers, Yana & Nguyen, Huong, 2014. "Women’s Land Rights and Children’s Human Capital in Vietnam," World Development, Elsevier, vol. 54(C), pages 18-31.
    5. Bai, Chong-En & Wu, Binzhen, 2014. "Health insurance and consumption: Evidence from China’s New Cooperative Medical Scheme," Journal of Comparative Economics, Elsevier, vol. 42(2), pages 450-469.
    6. El-Sayed, Abdulrahman M. & Palma, Anton & Freedman, Lynn P. & Kruk, Margaret E., 2015. "Does health insurance mitigate inequities in non-communicable disease treatment? Evidence from 48 low- and middle-income countries," Health Policy, Elsevier, vol. 119(9), pages 1164-1175.
    7. Samuel S. Lieberman & Adam Wagstaff, 2009. "Health Financing and Delivery in Vietnam : Looking Forward," World Bank Publications, The World Bank, number 2594, September.
    8. Nguyen Viet, Cuong, 2011. "The Impact of Health Insurance for Children: Evidence from Vietnam," MPRA Paper 36552, University Library of Munich, Germany.
    9. Olivier Blanchard & Francesco Giavazzi, 2006. "Rebalancing Growth in China: A Three-Handed Approach," China & World Economy, Institute of World Economics and Politics, Chinese Academy of Social Sciences, vol. 14(4), pages 1-20.
    10. Wagstaff, Adam & Yu, Shengchao, 2007. "Do health sector reforms have their intended impacts?: The World Bank's Health VIII project in Gansu province, China," Journal of Health Economics, Elsevier, vol. 26(3), pages 505-535, May.
    11. Van Minh, Hoang & Kim Phuong, Nguyen Thi & Saksena, Priyanka & James, Chris D. & Xu, Ke, 2013. "Financial burden of household out-of pocket health expenditure in Viet Nam: Findings from the National Living Standard Survey 2002–2010," Social Science & Medicine, Elsevier, vol. 96(C), pages 258-263.
    12. Somanathan, Aparnaa, 2008. "The impact of price subsidies on child health care use : evaluation of the Indonesian healthcard," Policy Research Working Paper Series 4622, The World Bank.
    13. Pablo Gottret & George J. Schieber & Hugh R. Waters, 2008. "Good Practices in Health Financing : Lessons from Reforms in Low and Middle-Income Countries," World Bank Publications, The World Bank, number 6442, September.
    14. Diana Cheung & Jean-Pierre Laffargue & Ysaline Padieu, 2016. "Insurance of Household Risks and the Rebalancing of the Chinese Economy: Health Insurance, Health Expenses and Household Savings," Pacific Economic Review, Wiley Blackwell, vol. 21(3), pages 381-412, August.
    15. Chen, Yuyu & Jin, Ginger Zhe, 2012. "Does health insurance coverage lead to better health and educational outcomes? Evidence from rural China," Journal of Health Economics, Elsevier, vol. 31(1), pages 1-14.
    16. Jean-Paul Fitoussi & Francesco Saraceno, 2008. "The intergenerational content of social spending : health care and sustainable growth in China," Sciences Po publications 2008-27, Sciences Po.
    17. Nguyen Viet, Cuong, 2010. "Public health services and health care utilization in Viet Nam," MPRA Paper 33610, University Library of Munich, Germany.
    18. Wagstaff, Adam, 2007. "Health insurance for the poor : initial impacts of Vietnam's health care fund for the poor," Policy Research Working Paper Series 4134, The World Bank.
    19. Wagstaff, Adam & Lindelow, Magnus & Jun, Gao & Ling, Xu & Juncheng, Qian, 2009. "Extending health insurance to the rural population: An impact evaluation of China's new cooperative medical scheme," Journal of Health Economics, Elsevier, vol. 28(1), pages 1-19, January.
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    21. Robert Lafrance, 2008. "China's Exchange Rate Policy: A Survey of the Literature," Discussion Papers 08-5, Bank of Canada.
    22. Ekman, Bjorn, 2007. "Catastrophic health payments and health insurance: Some counterintuitive evidence from one low-income country," Health Policy, Elsevier, vol. 83(2-3), pages 304-313, October.
    23. Arsenijevic, Jelena & Pavlova, Milena & Groot, Wim, 2013. "Measuring the catastrophic and impoverishing effect of household health care spending in Serbia," Social Science & Medicine, Elsevier, vol. 78(C), pages 17-25.

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    Keywords

    Health Monitoring&Evaluation; Health Economics&Finance; Environmental Economics&Policies; Insurance&Risk Mitigation; Health Systems Development&Reform;

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