Supplementary private health insurance: The impact of physician financial incentives on medical practice

Abstract

In the French diagnosis‐related group (DRG)‐based payment system, both private and public hospitals are financed by a public single payer. Public hospitals are overcrowded and have no direct financial incentives to choose one procedure over another. If a patient has a strong preference, they can switch to a private hospital. In private hospitals, the preference does come into play, but the patient has to pay for the additional cost, for which they are reimbursed if they have supplementary private health insurance. Do financial incentives from the fees received by physicians for different procedures drive their behavior? Using French exhaustive data on delivery, we find that private hospitals perform significantly more cesarean deliveries than public hospitals. However, for patients without private health insurance, the two sectors differ much less in terms of cesareans rate. We determine the impact of the financial incentive for patients who can afford the additional cost. Affordability is mainly ensured by the reimbursement of costs by private health insurance. These findings can be interpreted as evidence that, in healthcare systems where a public single payer offers universal coverage, the presence of supplementary private insurance can contribute to creating incentives on the supply side and lead to practices and an allocation of resources that are not optimal from a social welfare perspective.

Use of telehealth: Evidence from French teleconsultation for women’s healthcare, prior and during COVID-19 pandemic

“…These are often people with low socioeconomic status, living in environments with few health resources, or lacking adequate health information. 8,28,29 It would be interesting to study how teleconsultation can increase access to health services, especially for this part of the population that may also be in difficulty using teleconsultation. 30,31…”

Do budget constraints limit access to health care? Evidence from PCI treatments in Hungary

“…Capitation-based payment can also be seen as a tool which puts financial pressure on providers; capitated plans were found to send patients further away to lower-priced hospitals for giving birth, although, there was no evidence of lower quality of care (Ho & Pakes, 2014 ). Moreover, not only budgetary pressures, but a stronger profit motive can also play a part in medical decisions: private hospitals performed more caesarian sections than public institutions, especially if the cost difference was reimbursed by supplementary health insurance (Milcent & Zbiri, 2022 ). Patient sorting can also occur as it was found in the case of private providers in the UK (Beckert & Kelly, 2021 ).…”

Overuse of caesareans: Potential healthcare and financial benefits of prenatal education

“…The financial impact was simplified based on the following rationale: France's total number of deliveries is approximately 770 000 per year. A vaginal delivery costs about €2500; this cost is 40% higher for a CS 6 . If all women participated in prenatal education, there would be a decrease in CS per year corresponding to 1.4% of the 770 000 women who give birth annually in France.…”

“…A vaginal delivery costs about €2500; this cost is 40% higher for a CS. 6 If all women participated in prenatal education, there would be a decrease in CS per year corresponding to 1.4% of the 770 000 women who give birth annually in France. The difference between a CS and a vaginal delivery represents an additional cost of approximately €1000.…”