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on Insurance Economics |
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Issue of 2007‒04‒21
fourteen papers chosen by Soumitra K Mallick Indian Institute of Social Welfare and Bussiness Management |
| By: | R. Amy Puenpatom; Robert Rosenman (School of Economic Sciences, Washington State University) |
| Keywords: | repeated auction; efficiency,insurance, health insurance |
| JEL: | I11 I18 |
| Date: | 2006–02 |
| URL: | http://d.repec.org/n?u=RePEc:wsu:wpaper:rosenman-1&r=ias |
| By: | Denise Doiron (University of NSW); Glenn Jones (Macquarie University); Elizabeth Savage (CHERE, University of Technology, Sydney) |
| Abstract: | Both adverse selection and moral hazard models predict a positive relationship between risk and insurance; yet the most common finding in empirical studies of insurance is that of a negative correlation. In this paper we investigate the relationship between ex ante risk and private health insurance using data from the 2001 Australian National Health Survey (NHS). The Australian health system provides a setting where the relationship between risk and insurance is more transparent than many other institutional frameworks; private health insurance is not tied to employment; community rating limits the actions of insurers; and private coverage is high for a country providing free public hospital treatment. We find a strong positive association between self-assessed health and private health cover. We use the detailed information available in the NHS to investigate whether we can identify factors responsible for the negative correlation between risk (lower SAHS) and insurance cover. However this relationship persists despite the inclusion of a large set of controls for personal and socio-economic characteristics, risk-related behaviours, objective health measures and an index of mental health. The opposite effect of self-assessed health and long-term conditions on coverage suggests that SAHS is capturing factors such as personality or risk preferences. |
| Keywords: | Private health insurance, self-assessed health, Australia |
| JEL: | I11 |
| URL: | http://d.repec.org/n?u=RePEc:her:chewps:2006/2&r=ias |
| By: | Denzil Fiebig (University of NSW); Elizabeth Savage (CHERE, University of Technology, Sydney); Rosalie Viney (CHERE, University of Technology, Sydney) |
| Abstract: | The inter-relationship between private health insurance cover and hospital utilisation is complex. The current policy approach in Australia appears to rely on relatively simple models of the relationships between health insurance coverage, and public and private hospital use. There is considerable evidence of unexplained heterogeneity among the privately insured population. Heterogeneity of preferences is likely to be important not just in determining the uptake of private health insurance, but also the impact of changes in private health insurance on the use of private treatment. A number of studies have used attitudinal variables to model heterogeneity of preferences in other contexts. This study uses the 2001 ABS National Health Survey to identify ?types? among the insured population using their stated reasons for purchasing private health insurance. We find that insurance type is significantly associated with hospital utilisation, particularly the probability of being admitted as a public or private patient. We also find that the government?s insurance incentives were more attractive to particular types of the insured population. This has implications for the effectiveness of the insurance incentives and for the design of policies that aim to reduce pressure on the public hospital system. |
| Keywords: | Private health insurance, health policy, Australia |
| JEL: | I11 |
| URL: | http://d.repec.org/n?u=RePEc:her:chewps:2006/1&r=ias |
| By: | Ray Rees (Univerity of Munich); Patricia Apps (Univerity of Sydney) |
| Abstract: | This paper analyses the policy implications for health insurance markets of the development of genetic testing. A central issue surrounding this development is whether insurers should be allowed access to the information provided by such tests. The paper first shows that on efficiency grounds alone, insurance buyers should be allowed voluntarily to supply this information to insurers. The source of the considerable opposition to this proposal is really the distributional implications: those with the worst genetic endowments will as a result have to pay the highest insurance premiums. The paper then goes on to analyse possible redistributional policies that can remedy this. In doing so, it makes a significant departure from the mainstream literature on adverse selection in insurance markets, by assuming that individuals have differing income endowments. |
| Keywords: | health insurance, genetic testing |
| JEL: | I11 |
| URL: | http://d.repec.org/n?u=RePEc:her:chewps:2006/3&r=ias |
| By: | Jane Hall (CHERE, University of Technology, Sydney) |
| Abstract: | The topic of this paper is whether it is possible, given the current state of knowledge and technology, to design the appropriate market structure for managed competition. The next section reviews market failure in the private health insurance market. The subsequent two sections describe the principles of managed competition and its development and application in other countries. Then, the paper outlines recent developments in private health insurance policy in Australia, and proposals to apply managed competition in this country. The required design of the managed competition market place is described, and four major issues, risk adjustment, budget holding, consumer behaviour, and insurer behaviour, are identified. The final sections of the paper review the evidence on these four issues to determine if managed competition can be implemented, given current knowledge. |
| Keywords: | Health Insurance, Managed competition, Australia |
| JEL: | I11 |
| URL: | http://d.repec.org/n?u=RePEc:her:chedps:53&r=ias |
| By: | Lucinda Trigo Gamarra (University of Rostock) |
| Abstract: | Insurance products are distributed both by independent and dependent agents, although the use of independent agents is more costly. The product quality hypothesis states that independent agents provide both insurers and customers with higher service quality and therefore, remain on the market. On the contrary, according to the market imperfections hypothesis both intermediary types offer the same quality, and only coexist due to information asymmetries. Having conducted a written survey, we measure service quality differences by multivariate regression analysis. Our analysis shows that the higher level of service quality of independent agents supports the product quality hypothesis. The result is a separating equilibrium on the market. |
| Keywords: | Insurance intermediation, service quality, distribution systems |
| JEL: | G22 L15 L22 |
| Date: | 2007 |
| URL: | http://d.repec.org/n?u=RePEc:ros:wpaper:76&r=ias |
| By: | Jane Hall (CHERE, University of Technology, Sydney) |
| Abstract: | Until the 1996 Federal election, the Liberal Party remained committed to the repeal of Medicare. In that election the Liberal platform endorsed the continuation of Medicare, and support for private health insurance. Since then the Government has pursued a strategy of support for private health insurance involving three stages: one, rebates for the poor and penalties for the well-off; two, universal rebates; and three, departure from community rating to what has been described as ?lifetime health cover?. This paper reviews the coverage by the quality media of the private health insurance issue from the beginning of 1996 (prior to the beginning of the formal election campaign) to the end of 1999 (after the announcement of lifetime health cover). Over 500 articles were reviewed. Federal elections and budgets are most likely to trigger articles on private health insurance. The topic has become newsworthy, with stories now appearing which report only changes in insurance coverage. Most articles report differing perspectives on the issue; however, opposing views are frequently given little column space and appear at the end of the article. While many articles report events in a factual way, there are a significant number which provide only one perspective or viewpoint. The media rely heavily on authoritative experts and these are usually spokespersons for the private sector and the organised medical profession. When independent figures are quoted, there has been no disclosure of any financial or other links with the private health sector. The story angle was generally conflict between the various stakeholders, although the politics of health policy was also a major theme. The editorials, in contrast, urged a view of what was good for the country, rather than the winners/losers in a political conflict. The Age and the Sydney Morning Herald (SMH) took quite different stances on the issue of access, hospital costs and the importance of community rating. Clearly, the media has a role to inform. Many articles are a means of disseminating new policies, or explaining their detail, or advising individuals of the implications for them. However, the media has also defined what and why private health insurance is a problem, floated unpopular policy responses, defined the solution and popularised it. For those concerned to see public debate on private health insurance, to promote information and evidence as a basis for policy, and to see community values inform health policy, there is little here to encourage. |
| Keywords: | Private health insurance, media, Australia |
| JEL: | I11 |
| URL: | http://d.repec.org/n?u=RePEc:her:chedps:45&r=ias |
| By: | Kees van Gool (CHERE, University of Technology, Sydney); Elizabeth Savage (CHERE, University of Technology, Sydney); Rosalie viney (CHERE, University of Technology, Sydney); Marion Haas (CHERE, University of Technology, Sydney); Rob Anderson |
| Abstract: | The Medicare Safety Net Policy was introduced in March 2004 to provide financial relief for those Australians who face high out-of-pocket costs incurred through out-of-hospital medical services. This study examines variation in Safety Net benefits by federal electorate and by type of medical service. The results indicate widespread variation in Safety Net benefits. There were significantly higher Safety Net benefits in electorates with relatively high median family income and lower health care needs. The study also shows that patients who use private obstetrician and assisted reproductive services are the greatest beneficiaries of the policy. Whilst the Safety Net was introduced to help reduce out-of-pocket medical costs, this analysis shows that it may be missing the intended policy target. |
| Keywords: | Medicare, health care policy, out-of-pocket costs, co-payments,catastrophic insurance, Australia |
| JEL: | I11 |
| URL: | http://d.repec.org/n?u=RePEc:her:chewps:2006/8&r=ias |
| By: | Donald J Wright (Department of Economics, University of Sydney) |
| Abstract: | Consumers, when ill, often have the choice of being treated for free in a public hospital or at a positive price in a private hospital. To compensate for the positive price, private hospitals offer a higher quality treatment. Private hospitals and doctors also have a degree of monopoly power in their pricing. In this setting, it is shown that the presence of insurance does not affect the number of consumers treated in the private hospital, rather the private hospital and the doctor respond to the presence of insurance by increasing the prices they charge and the quality of the private hospital experience. |
| Keywords: | Physician payments |
| JEL: | I11 |
| URL: | http://d.repec.org/n?u=RePEc:her:chedps:55&r=ias |
| By: | Hendrik Jürges |
| Abstract: | Germany is one of the few OECD countries with a two-tier system of statutory and primary private health insurance. Both types of insurance provide fee-for-service insurance, but chargeable fees for identical services are more than twice as large for privately insured pa-tients than for statutorily insured patients. This price variation creates incentives to induce demand primarily among the privately insured. Using German SOEP 2002 data, I analyze the effects of insurance status and district (Kreis-) level physician density on the individual num-ber of doctor visits. The paper has four main findings. First, I find no evidence that physician density is endogenous. Second, conditional on health, privately insured patients are less likely to contact a physician but more frequently visit a doctor following a first contact. Third, physi-cian density has a significant positive effect on the decision to contact a physician and on the frequency of doctor visits of patients insured in the statutory health care system, whereas, fourth, physician density has no effect on privately insured patients' decisions to contact a physician but an even stronger positive effect on the frequency of doctor visits than the statu-torily insured. These findings give indirect evidence for the hypothesis that physicians induce demand among privately insured patients but not among statutorily insured. |
| Keywords: | supplier-induced demand, health care utilization |
| JEL: | I11 |
| Date: | 2007 |
| URL: | http://d.repec.org/n?u=RePEc:diw:diwwpp:dp689&r=ias |
| By: | Paul Pichler |
| Abstract: | We show that redistributive tax and transfer systems have a distortionary e®ect and an insurance e®ect, if agents face idiosyncratic uninsurable earnings risk. These two e®ects imply that redistributive taxes decrease both mean consumption and the standard deviation of consumption. Using household data, we construct an `income compression' measure of the redistributiveness of the tax system and empirically test for the presence of these two e®ects by exploiting di®erences in US state taxes. We ¯nd that tax redistributiveness explains much of the variation in the mean and standard deviation of the within-state consumption distributions over the US. This provides evidence for the presence of both distortionary and insurance e®ects of redistributive taxes and transfers. |
| JEL: | C68 E47 E52 |
| Date: | 2007–03 |
| URL: | http://d.repec.org/n?u=RePEc:vie:viennp:0702&r=ias |
| By: | Jukka Lassila; Niku Määttänen; Tarmo Valkonen |
| Abstract: | We analyze how changes in the mandatory pension system and the increasing life expectancy will affect the need for private retirement savings in Finland. The time horizon we consider is that of current young generations. We discuss private retirement savings from the point of view households, financial institutions, and public sector. |
| Keywords: | personal saving, pension insurance, tax subsidies |
| JEL: | D14 G22 H24 J11 |
| Date: | 2007–04–19 |
| URL: | http://d.repec.org/n?u=RePEc:rif:dpaper:1089&r=ias |
| By: | Eddy van Doorslaer (Erasmus University, Rotterdam); Philip Clarke (University of Sydney); Elizabeth Savage (CHERE, University of Technology, Sydney); Jane Hall (CHERE, University of Technology, Sydney) |
| Abstract: | Recent OECD country comparative evidence suggests that Australia?s mixed public-private health system does a good job in ensuring high and fairly equal access to doctor, hospital and dental care services. This paper provides some further analysis of the same data from the Australian National Health Survey for 2001 to see to what extent the general finding of horizontal equity remains when the full potential of the data is realized. We extend the common core cross-country comparative analysis by expanding the set of indicators used in the procedure of standardizing for health care need differences, by providing a separate analysis for the use for general practitioner and specialist care and by differentiating between admissions as public and private patients. Overall, our analysis confirms that in 2001 Medicare largely did seem to be attaining its goal of an equitable distribution of health care access: Australians in need of care did get to see a doctor and to be admitted to a hospital. However, they were not equally likely to see the same doctor and to end up in the same hospital bed. As in other OECD countries, higher income Australians are more likely to consult a specialist, all else equal, while lower income patients were more likely to consult a general practitioner. The unequal distribution of private health insurance contributes to the phenomenon that the better-off and the less well-off do not receive the same mix of services. There is a risk that, as in some other OECD countries, the Medicare objective of equal access for equal need may be further compromised by the future expansion of the private sector in secondary care services. To the extent that such inequalities in use may translate in inequalities in health outcomes, they may be some reason for concern. |
| Keywords: | Equity, OECD comparisons, hospital care, privae health insurance |
| JEL: | I11 |
| URL: | http://d.repec.org/n?u=RePEc:her:chewps:2006/13&r=ias |
| By: | Kees van Gool (CHERE, University of Technology, Sydney); Elizabeth Savage (CHERE, University of Technology, Sydney); Rosalie viney (CHERE, University of Technology, Sydney); Marion Haas (CHERE, University of Technology, Sydney); Rob Anderson |
| Abstract: | Objectives: The Medicare Safety Net Policy was introduced in March 2004 to provide financial relief for those Australians who face high out-of-pocket (OOP) costs for outpatient medical services. This study evaluates the extent to which out-of-pocket costs have fallen since the introduction of the Safety Net and examines the impact of the policy on the level of service use, the amount of benefits paid by government and fees charged by medical providers. Methods: Regression modelling of time series data was used to examine whether there have been significant changes in levels of service use, fees charged and benefits paid for services provided by specialists in the two-year period following the introduction of the Safety Net. Four speciality fields were examined in this analysis: general specialists? consultations, obstetrics, pathology and diagnostic imaging. Results: The analysis indicates that the introduction of the Safety Net coincided with a substantial rise in public funding for Medicare services and a much smaller reduction in OOP costs. The policy has coincided with a small but significant change in the number of pathology and diagnostic imaging services used and in some specialty areas a substantial increase in the fees charged by providers. The net impact shows that for specialists? consultations every dollar spent on the Medicare Safety Net, $0.68 went towards higher fees and $0.32 went towards reducing OOP costs. The corresponding figures for diagnostic imaging were $0.74 and $0.26 respectively. Conclusions: The Safety Net was heralded by the government as a fundamental reform in Australia?s Medicare program. Whilst the Safety Net was introduced to help reduce out-of-pocket medical costs, this analysis shows that in its first two years of operation, there has been significant leakage of public funding towards higher provider fees. More research is needed using longer term data to assess the impact of the policy on patient and provider behaviour more widely, including examining the policy?s impact on those who did qualify for Safety Net and those who did not, as well as more disaggregated analysis of different Medicare services. |
| Keywords: | Out-of-pocket costs; moral hazard; catastrophic insurance; health care financing; Australia |
| JEL: | I11 |
| URL: | http://d.repec.org/n?u=RePEc:her:chewps:2006/9&r=ias |