Demand for private health insurance: Is there a quality gap?

Quality of care is qualified as a main determinant of the demand forvoluntary private health insurance (PHI) in National Health Systems(NHS). This paper provides new evidence on the influence of the qualitygap between public and private health insurance and other demanddeterminants in the demand for PHI in Catalonia. The demand for PHI ismodelled as a demand for health care quality. Unlike previous studies, the database employed allows for the development of a link between thetheoretical and the empirical model dealing with unobserved heterogeneityand endogeneity issues. Results suggest that a rise in PHI qualityenhances an equivalent influence in the demand for PHI as an equalreduction of NHS quality. Income and price elasticity estimates areconsistent with the observed feature that PHI appears to be a luxurygood and individuals tend to be relatively insensible to tax relief'sand monetary co-payments in insurance contracts.

Changes in the demand for private medical insurance following a shift in tax incentives

The 1998 Spanish reform of the Personal Income Tax eliminated the 15% deduction for private medical expenditures including payments on private health insurance (PHI) policies. To avoid an undesirable increase in the demand for publicly funded health care, tax incentives to buy PHI were not completely removed but basically shifted from individual to group employer-paid policies. In a unique fiscal experiment, at the same time that the tax relief for individually purchased policies was abolished, the government provided for tax allowances on policies taken out through employment. Using a bivariate probit model on data from National Health Surveys, we estimate the impact of said reform on the demand for PHI and the changes occurred within it. Our findings suggest that the total probability of buying PHI was not significantly affected. Indeed, the fall in the demand for individual policies (by 10% between 1997 and 2001) was offset by an increase in the demand for group employer-paid ones, so that the overall size of the market remained virtually unchanged. We also briefly discuss the welfare effects on the state budget, the industry and society at large.

Are tax subsidies for private medical insurance self-financing? Evidence from a microsimulation model for outpatient and inpatient episodes

This paper analyses whether or not tax subsidies to private medicalinsurance are self-financing by means of a structural approach. Weconstruct a simulation routine based on a microeconometric discretechoice model that allows us to evaluate the impact of premium changeson the utilisation of outpatient and inpatient health care services. Wesimulate the 1999 Spanish tax reform that abolished the tax deductionfor expenditures on private health insurance using a representativesample of the Catalan population. Prior to this reform, foregone taxrevenue arising from deductions after the purchase of private insuranceamounted to 69.2 M. per year. In contrast, the elimination of thesubsidies to private policies is estimated to generate an extra costfor the public sector of about 8.9 M. per year.

Price policies and Price dispersion in the private healthcare insurance industry: The Catalan case

We present an overlapping generations model that explains price dispersion among Catalonian healthcare insurance firms. The model shows that firms with different premium policies can coexist. Furthermore, if interest rates are low, firms that apply equal premium to all insureds can charge higher average prices than insurers that set premiums according to the risk of insured. Economic theory, health insurance, health economics.

The evolution of inequity in the access to health care in Spain: 1987-2001

This paper reports an analysis of the evolution of equity in access to health care in Spain over the period 1987-2001, a time span covering the development of the modern Spanish National Health System. Our measures of access are the probabilities of visiting a doctor, using emergency services and being hospitalised. For these three measures we obtain indices of horizontal inequity from microeconometric models of utilization that exploit the individual information in the Spanish National Health Surveys of 1987 and 2001. We find that by 2001 the system has improved in the sense that differences in income no longer lead to different access given the same level of need. However, the tenure of private health insurance leads to differences in access given the same level of need, and its contribution to inequity has increased over time, both because insurance is more concentrated among the rich and because the elasticity of utilization for the three services has increased too.

An overlapping generations approach to price policies in privatehealthcare insurance. The Catalan case

We analyze premium policies and price dispersion among private healthcare insurance firms from an overlapping-generations model. The model shows that firms that apply equal premium to all policyholders and firms that set premiums according to the risk of insured can coexist in the short run, whereas coexistence is unlikely in the long run because it requires the coincidence of economic growth and interest rates. We find support for the model’s results in the Catalan health insurance industry. Keywords: Economic theory, price policies, health insurance, health economics, overlapping-generations. JEL Classifications: I11 / L11 / L23

The Evolution of Inequity in the Access to Health Care in Spain: 1987-2001

This paper reports an analysis of the evolution of income related health inequalities in Spain over the period 1987-2001. We use recently developed methods in order to cardinalise and model self assessed health within a regression framework, decompose the sources of inequality and explain the observed differences between 1987 (one year after the 1986 General Health Act was approved) and 2001 (the latest available representative data on health for the Spanish population). The results show that the period has witnessed a reduction in income related health inequality. The driver of such reduction has been the weakening of the income health gradient, which lends support to the hypothesis that the important health policy reforms implemented over the period have been successful in the objective of reducing socio-economic inequalities in health. Our results also suggest that actions aimed at improving the health of those with low levels of education and of those who are not actively participating in the labor market would lead to further reductions in income related health inequality.

Unobserved heterogeneity and censoring in the demand for health care

This paper analyses the demand for private health care by Spanishhouseholds using a micro budget survey. The methodology used takescare of the three part decision process involved in this type ofbehaviour, namely the decision to use private health care, howoften to do so and how much to spend each time and also the effectsof unobserved heterogeneity. Since the theoretical frameworkcorresponds to the Grossman model of health investment, the resultsalso provide a test of the theory when these issues are considered.Finally, the obtained evidence also suggest that the current systemof tax deductions for private health care expenditures is regressive.

Body size, activity, employment and wages in Europe: A first approach

This paper examines the associations between obesity, employment status and wages for several European countries. Our results provide weak evidence that obese workers are more likely to be unemployed or tend to be more segregated in self-employment jobs than their non-obese counterparts. We also find difficult to detect statistically significant relationships between obesity and wages. As previously reported in the literature, the association between obesity, unemployment and wages seems to be different for men and women. Moreover, heterogeneity is also found across countries. Such heterogeneity can be somewhat explained by some labor market institutions, such as the collective bargaining coverage and the employer-provided health insurance.

Deciding the sale of a life policy in the viatical market: Implications on individual welfare

[cat] En aquest article, es presenta un model econòmic que permet determinar la venda o no d'una pòlissa de vida (total o en part) per part d'un assegurat malalt terminal en el mercat dels viatical settlements. Aquest mercat va aparèixer a finals de la dècada dels 80 a conseqüència de l'epidèmia de la SIDA. Actualment, representa una part del mercat dels life settlements. Les pòlisses que es comercialitzen en el mercat dels viaticals són aquelles on l'assegurat és malalt terminal amb una esperança de vida de dos anys o menys. El model és discret i considera només dos períodes (anys), ja que aquesta és la vida residual màxima que contempla el mercat. L'agent posseix una riquesa inicial que ha de repartir entre consum i herència. S'introdueix en primer lloc la funció d'utilitat esperada del decisor i, utilitzant programació dinàmica, es dedueix l'estratègia que reporta una utilitat més gran (no vendre/vendre (en part) la pòlissa en el moment zero/vendre (en part) la pòlissa en el moment ú). L'òptim depèn del preu de la pòlissa venuda i de paràmetres personals de l'individu. Es troba una expressió analítica per l'estratègia òptima i es realitza un anàlisi de sensibilitat.

Deciding the sale of a life policy in the viatical market: Implications on individual welfare

[cat] En aquest article, es presenta un model econòmic que permet determinar la venda o no d'una pòlissa de vida (total o en part) per part d'un assegurat malalt terminal en el mercat dels viatical settlements. Aquest mercat va aparèixer a finals de la dècada dels 80 a conseqüència de l'epidèmia de la SIDA. Actualment, representa una part del mercat dels life settlements. Les pòlisses que es comercialitzen en el mercat dels viaticals són aquelles on l'assegurat és malalt terminal amb una esperança de vida de dos anys o menys. El model és discret i considera només dos períodes (anys), ja que aquesta és la vida residual màxima que contempla el mercat. L'agent posseix una riquesa inicial que ha de repartir entre consum i herència. S'introdueix en primer lloc la funció d'utilitat esperada del decisor i, utilitzant programació dinàmica, es dedueix l'estratègia que reporta una utilitat més gran (no vendre/vendre (en part) la pòlissa en el moment zero/vendre (en part) la pòlissa en el moment ú). L'òptim depèn del preu de la pòlissa venuda i de paràmetres personals de l'individu. Es troba una expressió analítica per l'estratègia òptima i es realitza un anàlisi de sensibilitat.

Neither Private nor Public: The Effects of Communal Provision of Water on Child Health in Peru

The literature on local services has focused on the effects of privatization and, if anything, has compared the effects of private and mixed public-private systems versus public provision. However, alternative forms of provision such as cooperatives, which can be very prevalent in many developing countries, have been completely ignored. In this paper, we investigate the effects of communal water provison (Comités Vecinales and Juntas Administrativas de Servicios de Saneamiento) on child health in Peru. Using detailed survey data at the household- and child-level for the years 2006-2010, we exploit the cross-section variability to assess the differential impact of this form of provision. Despite controlling for a wide range of household and local characteristics, the municipalities served by communal organizations are more likely to have poorer health indicators, what would result in a downward bias on the absolute magnitude of the effect of cooperatives. We rely on an instrumental variable strategy to deal with this potential endogeneity problem, and use the personnel resources and the administrative urban/rural classi fication of the municipalities as instruments for the provision type. The results show a negative and signi cant effect of comunal water provision on diarrhea among under- five year old children. Keywords: water utilities, cooperatives, child health, regulation, Peru. JEL Classi fication Numbers: L33; L50; L95

Willigness to pay for long-term care coverage: the role of private information and self-insurance

Both public and private insurance for long-term care is undeveloped in some European countries such as in Spain and empirical evidence is still limited. This paper aims at exmining the determinants of the demand for Long Term Care (LTC) coverage in Spain using contingent valuation techniques. Our findings indicate that only one-fifth of the population is willing to pay to assure coverage decisions are significantly affected by private information asymmetry and housing tenure in giving rise to self-insurance reduces the probability of insurance being hypothetically purchased.

Willigness to pay for long-term care coverage: the role of private information and self-insurance

Both public and private insurance for long-term care is undeveloped in some European countries such as in Spain and empirical evidence is still limited. This paper aims at exmining the determinants of the demand for Long Term Care (LTC) coverage in Spain using contingent valuation techniques. Our findings indicate that only one-fifth of the population is willing to pay to assure coverage decisions are significantly affected by private information asymmetry and housing tenure in giving rise to self-insurance reduces the probability of insurance being hypothetically purchased.