Advertisement

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

  • Astrid Kiil
Article

Abstract

This study estimates the effect of employment-based private health insurance (EPHI) on the use of covered health care services based on Danish survey data collected in 2009. The paper provides some of the first estimates of how EPHI affects the use of health care services in a Scandinavian context. The effect of EPHI is estimated using propensity score matching. This method is shown to provide plausible estimates given the institutional setting of EPHI in Denmark and a wide set of relevant covariates. Considering the full sample of occupationally active, it is found that EPHI does not significantly affect the probability of having had any hospitalisations, physiotherapist, chiropractor, psychologist, specialist, or ambulatory contacts within a 12 month period. Restricting the analysis to the subsample of privately employed, the estimated effects for ambulatory contacts and hospitalisation are somewhat higher and statistically significant. More precisely, it is found that EPHI increases the probability of hospitalisation from 5.1 to 8.5% and the probability of having had any ambulatory contacts from 17.9 to 23.3% among the privately employed.

Keywords

Duplicate health insurance Demand for health care Moral hazard Matching estimator Denmark 

Abbreviations

EPHI

Employment-based private health insurance

ATT

Average treatment effect on the treated

JEL Classification

C31 I11 

Preview

Unable to display preview. Download preview PDF.

Unable to display preview. Download preview PDF.

References

  1. Aarbu, K. O. (2010). Demand patterns for treatment insurance in Norway. Department of Economics discussion paper no. 11/2010. Norwegian School of Economics and Business Administration. Retrieved April 29, 2011 from http://papers.ssrn.com/sol3/papers.cfm?abstract_id=1589507&download=yes.
  2. Aavik A. (2001) Bounding a matching estimator: The case of a Norwegian training program. Oxford Bulletin of Economics and Statistics 63(1): 115–143CrossRefGoogle Scholar
  3. Abadie B., Imbens G. W. (2008) On the failure of the bootstrap for matching estimators. Econometrica 76(6): 1537–1557CrossRefGoogle Scholar
  4. Anderson, M., Dobkin, C., & Gross, T. (2010). The effect of health insurance coverage on the use of medical services. Working paper no. 15823. The National Bureau of Economics Research. Retrieved May 12, 2011 from http://www.nber.org/papers/w15823.pdf?new_window=1.
  5. Arrow K. J. (1963) Uncertainty and the welfare economics of medical care. American Economic Review 53: 941–973Google Scholar
  6. Barros P. P., Machado M. P., Sanz-de-Galdeano A. (2008) Moral hazard and the demand for health services: A matching estimator approach. Journal of Health Economics 27(4): 1006–1025PubMedCrossRefGoogle Scholar
  7. Bech M., Lauridsen J. (2009) Exploring the small area variation and spatial patterns in outpatient treatments. Health Services & Outcomes Research Methodology 9: 177–196CrossRefGoogle Scholar
  8. Becker, S. O., & Caliendo, M. (2006). MHBOUNDS: Stata module to estimate Mantel-Haenszel bounds to check sensitivity of estimated average treatment effects on the treated. Retrieved April 29, 2011 from http://www.stata-journal.com/software/sj7-1/st0121/.
  9. Becker, S. O., & Caliendo, M. (2007). MHBOUNDS—sensitivity analysis for average treatment effects. Discussion paper no. 2542. The Institute for the Study of Labour (IZA). Retrieved April 29, 2011 from http://ftp.iza.org/dp2542.pdf.
  10. Becker, S. O. & Muendler, M.-A. (2008). The effect of FDI on job security. The B.E. Journal of Economic Analysis & Policy, 8(1), Article 8.Google Scholar
  11. Besley T., Hall J., Preston I. (1999) The demand for private health insurance: Do waiting lists matter?. Journal of Public Economics 72: 155–181CrossRefGoogle Scholar
  12. Bhandari A., Wagner T. (2006) Self-reported utilization of health care services: Improving measurement and accuracy. Medical Care Research and Review 63(2): 217–235PubMedCrossRefGoogle Scholar
  13. Borchsenius, V., & Hansen, J. V. (2010). Er sundhedsforsikrede mindre syge end uforsikrede? (In English: Are health insured less ill than uninsured?) Report 2010:6. The Danish Insurance Association.Google Scholar
  14. Bryson, A., Dorsett, R., & Purdon, S. (2002). The use of propensity score matching in the evaluation of active labour market policies. Working paper no. 4. Policy Studies Institute and National Centre for Social Research. Retrieved April 29, 2011 from http://eprints.lse.ac.uk/4993/1/The_use_of_propensity_score_matching_in_the_evaluation_of_active_labour_market_policies.pdf.
  15. Buchmueller T. C., Couffinhal A., Grignon M., Perronnin M. (2004) Access to physician services: Does supplemental insurance matter? Evidence from France. Health Economics 13(7): 669–687PubMedCrossRefGoogle Scholar
  16. Bundorf M. K. (2002) Employee demand for health insurance and employer health plan choices. Journal of Health Economics 21: 65–88PubMedCrossRefGoogle Scholar
  17. Caliendo, M., Hujer, R., & Thomsen, S. L. (2005). The employment effects of job creation schemes in Germany—a microeconometric evaluation. Discussion paper no. 1512. Institute for the Study of Labor (IZA). Retrieved April 29, 2011 from ftp://repec.iza.org/RePEc/Discussionpaper/dp1512.pdf.
  18. Caliendo, M., & Kopeinig, S. (2005). Some practical guidance for the implementation of propensity score matching. Discussion paper no. 1588. Institute for the Study of Labor (IZA). Retrieved April 29, 2011 from http://ftp.iza.org/dp1588.pdf.
  19. Cameron A. C., Trivedi P. K. (2005) Microeconometrics. Methods and applications. Cambridge University Press, New YorkGoogle Scholar
  20. Cameron A. C., Trivedi P. K., Milne F., Piggott J. (1988) A microeconometric model of the demand for health care and health insurance in Australia. Review of Economic Studies 1: 85–106CrossRefGoogle Scholar
  21. Chiappori P.-A., Durand F., Geoffard P.-Y. (1998) Moral hazard and the demand for physician services: First lessons from a French natural experiment. European Economic Review 42: 499–511CrossRefGoogle Scholar
  22. Christiansen, T., Lauridsen, J., & Kamper-Jørgensen, F. (2002). Demand for private health insurance and demand for health care by privately and non-privately insured in Denmark. Health economics papers 2002:1. University of Southern Denmark. Retrieved April 29, 2011 from http://www.healtheconomics.dk/.
  23. Colombo, F., & Tapay, N. (2004). Private health insurance in OECD countries: The benefits and costs for individuals and health systems. In Towards high-performing health systems: Policy studies. OECD Health Working Paper no. 15. Paris: OECD.Google Scholar
  24. Cook C., Heath F., Thompson R. L. (2000) A meta-analysis of response rates in web- or internet-based surveys. Educational and Psychological Measurement 60(6): 821–836CrossRefGoogle Scholar
  25. Copenhagen Economics. (2008). Sundhedsforsikringer - en løsning på fremtidens velfærd? (In English: Health insurance policies - a key to future welfare?). Analysis report. The Danish Insurance Association. Retrieved April 29, 2011 from http://www.forsikringogpension.dk/temaer/sundhedsforsikringer/det-mener-vi/Documents/Sundhedsforsikringer_final_201010.pdf.
  26. Coulson N. E., Terza J. V., Neslusan C. A., Bruce S. (1995) Estimating the moral-hazard effect of supplemental medical insurance in the demand for prescription drugs by the elderly. American Economic Review 85(2): 122–126PubMedGoogle Scholar
  27. Danish Agency for Science. (2008). Den danske erhvervsstruktur - udviklingstendenser og dynamikker (In English: The Danish occupational structure—trends and dynamics). Retrieved April 29, 2011 from http://www.fi.dk/publikationer/2008/den-danske-erhvervsstruktur-udviklingstendenser-og-dynamikker/Erhvervsstruktur.pdf.
  28. Danske Bank. (2011). Middelkurser i København, marts 2011 (In English: Average exchange rates Copenhagen, March 2011). Retrieved April 27, 2011 from http://app.danskebank.dk/da-dk/Privat/Daglig-oekonomi/Valuta/Documents/Valutaoversigt2011/ValutaMarts2011.pdf.
  29. de Meza D. (1983) Health insurance and the demand for medical care. Journal of Health Economics 2: 47–54PubMedCrossRefGoogle Scholar
  30. de Meza D., Webb D. C. (2001) Advantageous selection in insurance markets. RAND Journal of Economics 32(2): 249–262CrossRefGoogle Scholar
  31. Evans R. G. (1974) Supplier-induced demand: Some empirical evidence and implications. In: Perlman M. (eds) The economics of health and medical care. Wiley, New YorkGoogle Scholar
  32. Feldman R., Dowd B., Leitz S., Blewett L.A. (1997) The effect of premiums on the small firms’ decision to offer health insurance. Journal of Human Resources 32(4): 635–658CrossRefGoogle Scholar
  33. Finkelstein A., McGarry K. (2006) Multiple dimensions of private information: Evidence from the long-term care insurance market. American Economic Review 96: 938–958PubMedCrossRefGoogle Scholar
  34. Gerfin M., Schellhorn M. (2006) Nonparametric bounds on the effect of deductibles in health care insurance on doctor visits—-Swiss evidence. Health Economics 15: 1011–1020PubMedCrossRefGoogle Scholar
  35. Glied, S., & Zivin, J. G. (2004). Modeling employer decisions to offer health insurance. Working paper. Department of Policy and Management, Mailman School of Public Health, Colombia University. Retrieved April 29, 2011 from http://www.rwjf.org/files/research/no7researchabstract.pdf.
  36. Grepperud S., Iversen T. (2011) Hvem har arbeidsgiverfinansiert behandlingsforsikring? (In English: Who has employer-financed treatment insurance?). Tidsskrift for velferdsforskning 14(1): 15–24Google Scholar
  37. Grossman M. (1972) On the concept of health capital and the demand for health. Journal of Political Economy 80(2): 223–255CrossRefGoogle Scholar
  38. Harmon C., Nolan B. (2001) Health insurance and health services utilization in Ireland. Health Economics 10(2): 135–145PubMedCrossRefGoogle Scholar
  39. Health Insurance denmark. (2009). Årsrapport 2009 (In English: Annual report 2009). Retrieved April 29, 2011 from http://www.sygeforsikring.dk/Default.aspx?ID=23.
  40. Heckman J. (1997) Instrumental variables: A study of implicit behavioral assumptions used in making program evaluations. Journal of Human Resources 32(3): 441–462CrossRefGoogle Scholar
  41. Heckman J. J., Ichimura H., Todd P. (1998) Matching as an econometric evaluation estimator. Review of Economic Studies 65(2): 261–294CrossRefGoogle Scholar
  42. Hemenway D. (1990) Propitious selection. Quarterly Journal of Economics 105(4): 1063–1069CrossRefGoogle Scholar
  43. Höfter R. H. (2006) Private health insurance and utilization of health services in Chile. Applied Economics 38(4): 423–439CrossRefGoogle Scholar
  44. Holly A., Lucien G., Gianfranco D., Brigitte B. (1998) An econometric model of health care utilization and health insurance in Switzerland. European Economic Review 42: 513–522CrossRefGoogle Scholar
  45. Imbens G. W., Wooldridge J. M. (2009) Recent developments in the econometrics of program evaluation. Journal of Economic Literature 47(1): 5–86CrossRefGoogle Scholar
  46. Johar M. (2009) The impact of the Indonesian health card program: A matching estimator approach. Journal of Health Economics 28: 35–53PubMedCrossRefGoogle Scholar
  47. Jones A. M., Koolman X., van Doorslaer E. (2006) The impact of supplementary private health insurance on the use of specialists in selected European countries. Annales d’Economie et de Statistiques 83-84: 251–275Google Scholar
  48. Kaestner, R., & Khan, N. (2010). Medicare part D and its effect on the use of prescription drugs, use of other health care services and health of the elderly. Working paper no. 16011. The National Bureau of Economic Research. Retrieved May 12, 2011 from http://www.nber.org/papers/w16011.pdf?new_window=1.
  49. Kiil, A. (2011). Determinants of employment-based private health insurance in Denmark. Nordic Journal of Health Economics, 1(1), 1–47. Retrieved October 28, 2011 from https://www.journals.uio.no/index.php/NJHE/issue/current.
  50. Kiil, A., & Pedersen, K. M. (2009). The Danish survey on voluntary health insurance 2009. Data documentation: Population, design, and descriptive statistics. Health Economics papers 2009:3. University of Southern Denmark. Retrieved April 29, 2011 from http://www.healtheconomics.dk/.
  51. King D., Mossialos E. (2005) The determinants of private medical insurance prevalence in England, 1997–2001. Health Services Research 40(1): 195–212PubMedCrossRefGoogle Scholar
  52. Kjellberg, J., Andreasen, J. N., & Søgaard, J. (2010). Private sundhedsforsikringer (In English: Private health insurances). Research report. Danish Institute for Health Services Research. Retrieved April 29, 2011 from http://forsiden.3f.dk/assets/pdf/SD192038721.PDF.
  53. Lechner M. (2002) Program heterogeneity and propensity score matching: An application to the evaluation of active labor market policies. Review of Economics and Statistics 84(2): 205–220CrossRefGoogle Scholar
  54. Leuven, E., & Sianesi, B. (2003). PSMATCH2: Stata module to perform full Mahalanobis and propensity score matching, common support graphing, and covariate imbalance testing. Version 3.1.5. Retrieved April 29, 2011 from http://ideas.repec.org/c/boc/bocode/s432001.html.
  55. Madsen, P. G. H. (2010). Ventelister på landets hospitaler bekymrer danskerne (In English: The Danes worry over hospital waiting lists). Newsletter. Ugebrevet A4. Retrieved April 29, 2011 from http://www.ugebreveta4.dk/da/2010/201011/Baggrundoganalyse/Vaerdipolitikken_er_tilbage/Ventelister_paa_landets_hospitaler_bekymrer_danskerne.aspx.
  56. Manning W. G., Newhouse J. P., Duan N., Keeler E., Benjamin B., Leibowitz A., Marquis M.S. (1987) Health insurance and the demand for medical care: Evidence from a randomized experiment. American Economic Review 77: 251–277PubMedGoogle Scholar
  57. Manski C. F., Pepper J. (2000) Monotone instrumental variables: With an application to the returns to schooling. Econometrica 68: 997–1010CrossRefGoogle Scholar
  58. Mantel N., Haenszel W. (1959) Statistical aspects of the analysis of data from retrospective studies. Journal of the National Cancer Institute 22: 719–748PubMedGoogle Scholar
  59. Mossialos E., Thomson S. M. S. (2002) Voluntary health insurance in the European Union: A critical assessment. International Journal of Health Services 32: 19–88PubMedCrossRefGoogle Scholar
  60. Nyman J. A., Maude-Griffin R. (2001) The welfare economics of moral hazard. International Journal of Health Care Finance and Economics 1(1): 23–42PubMedCrossRefGoogle Scholar
  61. OECD. (2004). Proposal for a taxonomy of health insurance OECD Study on Private Health Insurance. Working document. OECD Health Project. Retrieved April 29, 2011 from http://www.oecd.org/dataecd/24/52/31916207.pdf.
  62. OECD. (2009). Health at a glance 2009: OECD indicators. Report. Retrieved April 29, 2011 from http://www.oecd.org/dataoecd/55/2/44117530.pdf.
  63. OECD. (2010). Health data: Health expenditure by financing agent/scheme. Data tables. Retrieved May 3, 2011 from www.oecd.org/dataoecd/46/36/38979632.xls.
  64. Pauly M. V. (1968) The economics of moral hazard: Comment. American Economic Review 58: 531–537Google Scholar
  65. Pedersen K. M. (2005) Voluntary supplementary health insurance in Denmark. Public Finance and Management 5(4): 544–566Google Scholar
  66. Pedersen, K. M. (2011). Sickness absence and voluntary employer paid health insurance. Health economics papers 2011:1. University of Southern Denmark. Retrieved January 31, 2012 from http://www.healtheconomics.dk/.
  67. Propper C., Green K. (2001) A larger role for the private sector in financing UK health care: The arguments and the evidence. Journal of Social Policy 30(4): 685–704Google Scholar
  68. Reynolds C. L., DesJardins S. L. (2009) The use of matching methods in higher education research: Answering whether attendance at a 2-year institution results in differences in educational attainment. In: Smart J. C. (eds) Higher education: Handbook of theory and research (Vol. XXIV). Springer Science, DordrechtGoogle Scholar
  69. Riphahn R. T., Wambach A., Million A. (2003) Incentive effects in the demand for health care: A bivariate panel count data estimation. Journal of Applied Econometrics 18: 387–405CrossRefGoogle Scholar
  70. Rodríguez M., Stoyanova A. (2008) Changes in the demand for private medical insurance following a shift in tax incentives. Health Economics 17: 185–202PubMedCrossRefGoogle Scholar
  71. Rosenbaum P. R. (1995) Observational studies. Springer-Verlag, New YorkGoogle Scholar
  72. Rosenbaum P. R., Rubin D. B. (1983) The central role of the propensity score in observational studies for causal effects. Biometrika 70(1): 41–55CrossRefGoogle Scholar
  73. Rosenbaum P. R., Rubin D. B. (1985) Constructing a control group using multivariate matched sampling methods that incorporate the propensity score. The American Statistician 39(1): 33–38CrossRefGoogle Scholar
  74. Rothschild M., Stiglitz J. E. (1976) Equilibrium in competitive insurance markets: An essay on the economics of imperfect information. Quarterly Journal of Economics 90(4): 630–649CrossRefGoogle Scholar
  75. Rubin D. B. (1974) Estimating causal effects of treatments in randomized and nonrandomized studies. Journal of Educational Psychology 66(5): 688–701CrossRefGoogle Scholar
  76. Ruthledge, M. S. (2009). Asymmetric information and the generosity of employer-sponsored health insurance. PhD thesis. University of Michigan. Retrieved April 29, 2011 from http://deepblue.lib.umich.edu/bitstream/2027.42/77916/1/rutledma_1.pdf.
  77. Savage E., Wright D. J. (2003) Moral hazard and adverse selection in Australian private hospitals. Journal of Health Economics 22: 331–359PubMedCrossRefGoogle Scholar
  78. Schellhorn M. (2001) The effect of variable health insurance deductibles on the demand for physician visits. Health Economics 10(5): 441–456PubMedCrossRefGoogle Scholar
  79. Schokkaert E., van Ourti T., de Graeve D., Lecluyse A., van de Voorde C. (2010) Supplemental health insurance and equality of access in Belgium. Health Economics 19: 377–395PubMedCrossRefGoogle Scholar
  80. Seim A., Løvaas L., Hagen T. P. (2007) Hva kjennetegner virksomheter som kjøper private helseforsikringer? (In English: What characterises companies that purchase private health insurance?). Tidsskrift for Den norske legeforening 20(127): 2673–2675Google Scholar
  81. Sheehan, K. B. (2006). E-mail survey response rates: A review. Journal of Computer-Mediated Communication, 6(2).Google Scholar
  82. Sianesi B. (2004) An evaluation of the Swedish system of active labor market programs in the 1990s. Review of Economics and Statistics 86(1): 133–155CrossRefGoogle Scholar
  83. Søgaard, R., Bech, M. & Olsen, J. (2011). Effekten af private sundhedsforsikringer på forbruget af offentligt finansierede sygehusydelser (In English: The effect of private health insurances on the use of publicly financed hospital services). Report. Centre for Applied Health Services Research and Technology Assessment (CAST).Google Scholar
  84. Stabile M. (2001) Private insurance subsidies and public health care markets: Evidence from Canada. The Canadian Journal of Economics 34(4): 921–942CrossRefGoogle Scholar
  85. Statistics Denmark. (2009a). Befolkningens brug af internet 2009 (In English: Population internet use 2009). Retrieved April 29, 2011 from http://www.dst.dk/pukora/epub/upload/14039/it.pdf.
  86. Statistics Denmark. (2009b). LON01: Earnings for employees in the private sector by education, group of employees, components and sex. LON31: Earnings for central government employees by education, components and sex. LON44: Earnings for local government employees by industry, components and sex. Data tables. Retrieved February 28, 2011 from http://www.statistikbanken.dk/statbank5a/default.asp?w=1280.
  87. Statistics Denmark. (2010). AKU1: Population (15–66 years) in thousands by labour status, age and sex. BEF05 (18–75). Data tables. Retrieved April 29, 2011 from http://www.statistikbanken.dk/statbank5a/default.asp?w=1280.
  88. Strandberg-Larsen M., Nielsen M. B., Vallgårda S., Krasnik A., Mossialos E. (2007) Denmark: Health system review. Health Systems in Transition 9(6): 1–164Google Scholar
  89. The Danish Insurance Association. (2010). Sundhedsforsikringer - hovedtal 2003–2008. (In English: Health insurance—key figures 2003–2008). Data tables. Retrieved April 29, 2011 from http://www.forsikringogpension.dk/presse/Statistik_og_Analyse/statistik/forsikring/antal/Documents/Sundhedsforsikring%20-%20Antal%20forsikrede,%20præmier%20og%20erstatninger/Sundhedsforsikringer_2009.pdf.
  90. The Danish Insurance Association. (2011). Lægen afgør behandling – ikke sundhedsforsikringen. (In English: The doctor decides the treatment—not the health insurance). Retrieved November 24, 2011 from http://www.forsikringogpension.dk/presse/nyheder/2011/Sider/Laegen-afgoer-behandling-ikke-sundhedsforsikringen.aspx.
  91. The Ministry of Employment. (1996). LOV nr 286 af 24/04/1996. Lov om brug af helbredsoplysninger m.v. på arbejdsmarkedet. (In English: Law on use of health information ect. on the labour market). Act. Retrieved April 29, 2011 from https://www.retsinformation.dk/Forms/R0710.aspx?id=81200.
  92. The Ministry of Interior and Health. (2010). Sundhedsvæsenet i nationalt perspektiv 2010 (In English: The health care system in a national perspective 2010). Retrieved January 11, 2011 from http://www.sum.dk/Tal-og-analyser/~/media/Filer%20-%20Publikationer_i_pdf/2010/Tal%20og%20analyser/Det%20danske%20sundhedsvaesen%20i%20nationalt%20perspektiv/Sundhedsv%C3%A6senet%20i%20nationalt%20perspektiv%20juni2010.ashx.
  93. Vera-Hernández A. M. (1999) Duplicate coverage and the demand for health care: the case of Catalonia. Health Economics 8: 579–598PubMedCrossRefGoogle Scholar
  94. Wilde J. (2000) Identification of multiple equation probit models with endogenous dummy regressors. Economic Letters 69: 309–312CrossRefGoogle Scholar
  95. Windmeijer F. A. G., Santos Silva J. M. C. (1997) Endogeneity in count data models. An application to demand for health care. Journal of Applied Econometrics 12(3): 281–294CrossRefGoogle Scholar
  96. YouGov Zapera Ltd. (2009). Panel methodology. Retrieved August 20, 2009 from http://www.yougov.dk/Aboutus/PanelMethodology.aspx.

Copyright information

© Springer Science+Business Media, LLC 2012

Authors and Affiliations

  1. 1.COHERE—Centre of Health Economics ResearchUniversity of Southern DenmarkOdense CDenmark
  2. 2.AKF—Danish Institute of Governmental ResearchCopenhagen KDenmark

Personalised recommendations