Health Insurance Impacts on Health and Nonmedical Consumption in a Developing Country

27 Pages Posted: 10 Jan 2017

See all articles by Menno Prasad Pradhan

Menno Prasad Pradhan

Vrije Universiteit Amsterdam, School of Business and Economics; University of Amsterdam - Faculty of Economics and Business (FEB)

Date Written: April 1, 2005

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.

Keywords: Health Monitoring & Evaluation, Health Economics & Finance, Environmental Economics & Policies, Insurance & Risk Mitigation, Health Systems Development & Reform

Suggested Citation

Pradhan, Menno, Health Insurance Impacts on Health and Nonmedical Consumption in a Developing Country (April 1, 2005). World Bank Policy Research Working Paper No. 3563, Available at SSRN: https://ssrn.com/abstract=2894722

Menno Pradhan

Vrije Universiteit Amsterdam, School of Business and Economics ( email )

De Boelelaan 1105
Amsterdam, 1081HV
Netherlands
+31(0)20 444 6137 (Phone)
+31(0)20 444 6127 (Fax)

University of Amsterdam - Faculty of Economics and Business (FEB) ( email )

Roetersstraat 11
Amsterdam, 1018 WB
Netherlands

Do you have a job opening that you would like to promote on SSRN?

Paper statistics

Downloads
9
Abstract Views
250
PlumX Metrics