Assessing the Impact of Health Insurance on Demand for Medical Health Care: Preliminary Finding from

1
Assessing the Impact of Health Insurance on
Demand for Medical Health Care Preliminary
Finding from IFLS 1997 Data

• Budi Hidayat1, Robert Nordyk2, Glenn Melnick2,
  Cheryl Cashin1, Rainer Sauerborn1
• 1University of Heidelberg Germany
• 2USC/RAND Corporation - USA

2
Introduction

• What is insurance?
• any kind of HI plan that covers financial
  expenses or health services benefits to
  beneficiaries
• it ranges from traditional indemnity insurance
  (reimburse medical expenses) to a HMO (provides
  services as the benefits) (Thabrany, 1995)

3
Key Insurance Programs in Indonesia
4
Objectives

• Evidence the pattern of health care use between
  insured (ASKES, ASTEK, CARD PRIVATE) and
  uninsured people
• Asses the impact of insurance on demand for
  medical care

5
Theoretical framework

• Insurance increase the utilization by reducing
  effective price (Feldstein, 1996)

Price
D (uninsured)
P
D1 (insured)
P1
Q
Q1
Quantity
0
6
Theoretical framework (2)
Utility-based model of demand for health inputs.
Max UjU?Ui(Ci, Hi, C-i, H-i), (Ci, Hi, C-i,
H-i)?
- Health production function
Hi H(H0i, Mti, Mti-1, Xi, Zi, vt, ui, ?it )
- Household budget
PCCj PM(Ii)Mj Ydj, ?where Ydj Yj-PIIj
Demand functions for each individual
(reduced-form) Di D(Ii, I-i, PMi,
Pij, Ydj, PC, Ht-Ii (Mt-Ii,H0i),Xi, Zj, vt,ui,
?it)
7
The Methods
Maximum Likelihood Estimation ? logistic
regression (probability odd-ratios)
Pui(visitgt0) Xß ?
1 Pui ------------ 1 e-Zui where
Zui Xß ?
1 1-Pui ---------- 1 eZui
1 eZui (Pui/(1-Pui)) ------------- eZui
? odd ratios 1 e-Zui
8
The Data Source

• Indonesian Family Life Survey
• Panel Study fielded in 1993, 1997,(1999) and
  2001.
• Samples 7200 Households, gt 30,000 respondents,
  13/27 provinces covering 83 of population.
• Community/Facility Survey linked to HH Survey
• Issues related to health and nutrition, family
  planning, expenditure and poverty, and education

• On this study ? IFLS 1997 (IFLS2)
• Insurance status Book 3
• Health care use (a) public hospitals (b)
  private hospitals (c) public health centers (d)
  private doctors (e) private paramedics (f)
  private midwives (g) traditional healer and (h)
  others
• Health status self-reported morbidity,
  self-reported of health status, and Activities of
  Daily Living (ADL )
• Other covariates Roster

9
Variables

• Dependent variables health care uses
• Two major categories
• Outpatient ? dichotomous variables (1 if at
  least one visit at the last four weeks 0
  otherwise)
• pooled (all providers, public facilities
  private facilities)
• health centers, private doctors, public
  hospitals, private hospitals
• Inpatient ? dichotomous variables (1 if at
  least one visit at the last twelve months 0
  otherwise)
• pooled all providers, pooled public facilities
  and pooled private hospitals

10
Variables (2)

• Independent variables
• Insurance status as dummy (1 if had insurance, 0
  otherwise) e.g., ASKES, ASTEK, CARD, PRIVATE
• Health status as dummy, e.g., having symptom,
  having at least one limited daily living (ADL),
  poor health status
• Household covariates ? per capita expenditure
  quintiles (adjusted with CPI in 1997)
• Socio demographic ? age, gender, marital status,
  education, provinces, urban/rural
• Other covariates travel cost

11
Distribution of HI (Fraction covered)
Source IFLS, 1997 Wave.
12
HI coverage by expenditures quintiles
Total insured 14.4
Source IFLS, 1997 Wave.
13
HI coverage by expenditures quintiles
Source IFLS, 1997 Wave.
14
Rate outpatient care in all, public, and private
facilities
15
Rate outpatient care in four types of providers
16
Rate inpatient care in all, public, and private
facilities
17
significant at 10 significant at 5
significant at 1
18
significant at 10 significant at 5
significant at 1
19
significant at 10 significant at 5
significant at 1
20
Summary of insurance effects on the use of
outpatient care
1 omitted uninsured () in better access than
uninsured
significant at 10 significant at 5
significant at 1
21
Summary of insurance effects on the use of
inpatient care
1 omitted uninsured () in better access than
uninsured
significant at 10 significant at 5
significant at 1
22
Summary of findings and implications for further
research

• Evidence that insured people were more demanded
  on medical care than uninsured counterparts.
• The effects of insurance on demand for medical
  care was higher on the outpatient than on the
  inpatient care.
• However, the study was not free from the
  weakness, e.g.
• Insurance enter into the demand models
  EXOGENOUSLY, in fact, there is a possibility of
  endogenous/adverse selection, leading bias
  estimates.
• Reassignment of insurance variable (ASKES
  ASTEK) was done based on the employment status
  found in IFLS Wave 1, leading underestimate of
  coverage.

23
Summary of findings and implications for further
research (2)

• Proposing further study ? Econometric modeling
  (e.g. two stages procedures) for
• (1) treating endogeneity of insurance
• (2) involving various dependent variables (count
  data binary data)

• The results then worth full for
• Policy Analyses program evaluation (e.g.,
  Effect insurance on health input and health
  outcome)
• Expanding HI
• Development insurance (e.g., through provide
  basis data for actuarial).

24
Thank you
25
The Poor Have Received Little Govt
Distribution of Public Subsidies, Rp/cap/mo
Source Van del Walle, The Johns Hopkins Univ.
Press, 1995.
26
Insurance pays little of that
27
Rate outpatient in all providers by urban/rural
28
Outpatient rate by insurance status urban/rural
29
Outpatient rate by insurance status gender
30
Outpatient rate overall by insurance status
gender