Moral hazard and the demand for health services: A matching estimator approach

Abstract

JEL classification: C31 I11 Keywords:Demand for health services Matching estimator Moral hazard Portuguese health system a b s t r a c tWe estimate the impact of extra health insurance coverage beyond a National Health System on the demand for several health services. Traditionally, the literature has tried to deal with the endogeneity of the private (extra) insurance decision by finding instrumental variables. Since a priori instrumental variables are hard to find we take a different approach. We focus on the most common health insurance plan in Portugal, ADSE, which is given to all civil servants and their dependents. We argue that this insurance is exogenous, i.e., not correlated with the beneficiaries' health status. This identifying assumption allows us to estimate the impact of having ADSE coverage on the demand for three different health services using a matching estimator technique. The health services used are number of visits, number of blood and urine tests, and the probability of visiting a dentist. Results show large positive effects of ADSE coverage for number of visits and tests among the young (18-30 years old) but only the latter is statistically significantly different from zero. The effects represent 21.8% and 30% of the average number of visits and tests for the young. On the contrary, we find no evidence of moral hazard on the probability of visiting a dentist.

Does employment-based private health insurance increase the use of covered health care services? A matching estimator approach

“…The majority of these studies consider private health insurance that is purchased on an individual basis (Christiansen et al 2002;Gerfin and Schellhorn 2006;Höfter 2006;Holly et al 1998;Jones et al 2006;Pedersen 2005;Riphahn et al 2003), some consider employment-based contracts (Barros et al 2008;Chiappori et al 1998;Ruthledge 2009;Stabile 2001), and other again consider both, either combined (Schokkaert et al 2010) or separately (Buchmueller et al 2004). 4 This section focuses on the identification strategies used in the literature and briefly summarises the results.…”

“…relying on selection on observables, using extensive sets of control variables to mitigate potential selection bias (Christiansen et al 2002;Pedersen 2005;Stabile 2001). Along a similar line, Barros et al (2008) argued that selection on observables is plausible in the context of private health insurance given exclusively to civil servants and their dependents in Portugal and applied a matching estimator, and Søgaard et al (2011) estimated the effect of EPHI on the use of tax-financed health care services in Denmark using propensity score matching.…”

“…Moreover, while matching estimators have traditionally been used to evaluate effects of labour market programmes (Imbens and Wooldridge 2009), the use of the method to identify the impact of health insurance is more limited (see e.g. Barros et al 2008;Jones et al 2006;Johar 2009). …”

Testing for moral hazard in reinsurance markets

“…If one group is believed to be more likely subject to moral hazard problem than the other, the latter group is then treated as a reference group and econometric tests can be designed to test for the additional layer of moral hazard problem in the former group. This approach has been used in many previous empirical studies on moral hazard, such as Dionne and St-Michel (1991), Chiappori, Durand and Geoffard (1998), Chiappori and Salanie (2000), and Barros, Machado and Galdeano (2007).…”

Health care utilization and self-assessed health: specification of bivariate models using copulas

“…In the Portuguese context, the estimation of income-elasticities of utilization, and the assessment of the effect of supplementary health insurance on individuals' health care use provide well-known examples of applied work in this area, also relevant from a health policy perspective (Barros, 1999, Barros, Machado, Galdeano, 2005.…”