Slide Healthinsurance Pcvn Phadseminar2012

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Motivation and Research Question Data . . . . . . . . . . . . .Empirical Results on Insurance Uti lization Conclusion

.

.Determinants and Impacts of Health Insurance

Nonutilization

Hisaki Kono

September 20, 2012


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Motivation and Research Question

Many developing countries have attempted to expand the coverage ofhealth insurance to the poor and disadvantaged group in recent years.

Impact of health insurance on service utilization and out-of-pocket(OOP) payment varies across countries:

Service utilization:

positive: Waters (1999, Ecuador), Trujillo et al. (2005, Colombia), Yip and

Berman (2005, Egypt), Wagstaff et al. (2009, China)no impact: Thornton et al. (2010, Nicaragua), Waters (1999, Ecuador), Wagstaff(2010, Vietnam)

OOP payment:

reduction: Thornton et al. (2010, Nicaragua), Yip and Berman (2005, Egypt),Wagstaff (2010, Vietnam)no impact: Wagstaff et al. (2009, China)

The effect of the health insurance will depend on the demand sidefactors and supply side factors, so it can be quite context-dependent.

demand side: price elasticity of the healthcare utilizationsupply side: the accessibilities to healthcare facilities.

Need to identify what makes healthcare utilization and OOP not so

responsive to the health insurance provision in that country or region.


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Motivation and Research Question

An issue missing in the literature: discriminated service against theinsurance holders and nonutilization of insurance.

Insurance is helpful only when it is utilized. Insurance provision will have

a limited impact if insurance utilization rate is low.

A story of a patient visiting a central cancer hospital in Hanoi (Ha, 2011):

if he would use it, it would take two days for him to be fully checked.

it took him a morning to receive the same services when he paid with hisown money.

Vietnam Household Living Standard Survey 2006

insurance utilization (free health insurance card): 0.80 for inpatienttreatment, 0.55 for outpatient treatmentThree most cited reasons for the nonutilization

cumbersome procedures (21.9%)lower quality of health care service when using the insurance (11.9%)little prospect of receiving reimbursement (9.0%)

But we do not know when and where they chose not to utilize insurance.

We have detailed information on insurance utilization at each hospital

visit.

Correcting sample selection and endogeneity of the facility choice.


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Overview of the Result

The likelihood of insurance utilization is significantly and substantiallylower at the public central hospital.

Reflecting low incentives of the public, especially crowded, healthcare facilityto increase the number of patients?

The time cost, proxied by the respondents average working hour and the

household income per capita, affects the insurance utilization choice.Only we can provide is the indirect evidence on the discrimination as we donot have direct observations on the waiting time or the objective measure ofservice quality.

Less prospect of utilizing health insurance at the central hospital

discourages people from visiting there.

The average effect of insurance nonutilization on the healthcare

expenses per visit is around 1 million VND, which is 1.5 times larger than

the average healthcare expenses per visit.

C


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Data

2,673 adults aged 18 or older living in 60 communes, selected by the

multi-stage stratified random sampling with oversampling poorcommunes.

Health insurance is quite familiar. 68.7% have some health insurance,

16.2% do not have but did have some health insurance.

Table : Summary statistics

(A) Demographic variables

(1)Mean

gender: female 0.576 (0.016)Age of the respondent 43.201 (0.553)Respondent is an ethnic minority 0.236 (0.030)

Years in school 8.548 (0.322)log(1+household income per capita) 13.729 (0.065)ln(work hour) 3.020 (0.082)can read Kinh 0.963 (0.006)chronic disease 0.320 (0.015)last illness: severity (1-4) 2.329 (0.021)have HI 0.687 (0.027)

does not have but did have HI 0.162 (0.014)Observations 2426

M ti ti d R h Q ti D t E i i l R lt I Uti li ti C l i


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Insurance holdings

The majority of health insurance is health insurance for the poor, followed

by voluntary government health insurance, obliged government health

insurance (typically held by employees in public sector and formally

registered enterprises), and health insurance for the priority group (free).

(B) Insurance holdings across insurance types(1)

Meanstudent HI 0.042 (0.007)Poor household HI 0.326 (0.043)priority group HI 0.131 (0.013)obliged gov. HI 0.176 (0.030)

voluntary gov. HI 0.287 (0.031)private HI 0.023 (0.006)other HI 0.022 (0.005)Observations 1929

Standard errors in parentheses

Motivation and Research Question Data Empirical Results on Insurance Utilization Conclusion


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Motivation and Research Question Data . . . . . . . . . . . . .Empirical Results on Insurance Utilization ConclusionPattern of Health Insurance Utilization

Pattern of Health Insurance Utilization

Use the healthcare facility visit level data for the last disease in the last

12 months.

Information on the type of the healthcare facility visited, insurance

utilization, and the amount of healthcare expenses for each visit is

available.

Use observations which have health insurance, experienced illness in

the last 12 months, and visited any healthcare facilities.Insurance utilization rate is slightly lower for the ethnic minority and

female.

Table : Insurance Utilization

(1)Full sample

last illness: use HIKinh 0.782 (0.028)Ethnic_Minority 0.744 (0.034)Observations 1177


(1)Full sample

last illness: use HImale 0.803 (0.029)female 0.753 (0.028)Observations 1177




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Pattern of Health Insurance Utilization across Facilities

Private facilities: often no contract with the insurance agency, especiallysmall clinics.

In the analysis, we exclude the observation visiting the private facilities. Thenumber of observation is also small.

Among the public facilities, the province/city hospitals and district

hospitals/policlinics have high insurance utilization rates.The public facility with the lowest insurance utilization is the centralhospital.

in spite of relatively high administration and management ability.consistent with the discrimination story in the crowded public facilities.

Table : Insurance Utilization across healthcare facilities

(1)Treatment or examinations only

last illness: use HICentral 0.789 (0.047)Province 0.949 (0.030)District 0.960 (0.016)Commune 0.886 (0.022)Private_hospital 0.712 (0.140)Private_clinic 0.034 (0.028)

Observations 1025Standard errors in parentheses



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Health Insurance Utilization across Facilities and Policies

Standard errors are not reported because the sample size in eachsampling units are too small to calculate the clustered standard errors.

The priority group always utilize insurance at the central hospital, while

the insurance utilization rate for people with the obliged health insurance

is quite low at the central hospital.

Table : Insurance Utilization across Health Facilities and Types of Insurance

(1) (2) (3) (4)HI poor HI priority HI obliged HI voluntary

last illness: use HI

Central 0.837 (.) 1.000 (.) 0.676 (.) 0.804 (.)Province 0.880 (.) 1.000 (.) 1.000 (.) 0.903 (.)District 0.902 (.) 0.954 (.) 0.993 (.) 1.000 (.)Commune 0.866 (.) 0.993 (.) 0.976 (.) 0.855 (.)Observations 491 135 108 153

t statistics in parentheses



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Econometric Issues

Sample selection bias: Insurance utilization is observed only when theindividual had an insurance and chose to visit any health facilities.

Individual may not go to clinics/hospitals because they expect that they willnot utilize the insurance.Government may have provided the insurance to those who tend to beunfamiliar with insurance and are less likely to utilize insurance.We correct sample selection bias by the inverse probability weighting.

Endogeneity of facility choice: Which health facility to visit will depend onthe expectation on how likely they will use insurance there.

People who visited the central hospital may be those who have relativelyhigher prospect of utilizing insurance.The insurance utilization rate at the central hospital itself does not tell ushow difficult to utilize insurance there.

We use 2SLS with commune dummies as instrumental variables for hospitalchoice. We show in the paper that we can obtain conservative estimates ofthe effect of health facility on insurance utilization under the assumption thatindividuals in a commune where the commune members are more likely tovisit the central hospital are not less likely to utilize insurance at the centralhospital.



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. . . . . . . . . . . . .pPattern of Health Insurance Utilization

A test for the hypothesis that low prospect of insurance utilization affects the

healthcare facility choice

The endogeneity problem will arise mainly because the healthcare

facility choice will depend on the expectation how likely they will use the

insurance there.If the magnitude of the estimates obtained by the 2SLS is significantlylarger than that obtained by the OLS, which can be tested byDurbin-Wu-Hausman test, it is implied that the low prospect of utilizinginsurance at a given healthcare facility actually discourages people fromvisiting that healthcare facility.

Another cause of the endogeneity is the measurement errors. But in that

case, the magnitude of the coefficient when correcting the endogeneitybecomes smaller due to the attenuation bias.



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. . . . . . . . . . . . .pPattern of Health Insurance Utilization

(1) (2) (3) (4) (5) (6) (7) (8)Probit Probit OLS 2SLS IPW 2SLS IPW 2SLS IPW 2SLS IPW 2S

Central hospital -0.153 -0.133 -0.140 -0.284 -0.254 -0.298 -0.565 -0.390(0.039) (0.031) (0.050) (0.104) (0.072) (0.089) (0.130) (0.199

Province/City hospital 0.039 0.021 0.005 0.027 -0.071 -0.154 -0.272

-0.243

(0.053) (0.054) (0.036) (0.085) (0.082) (0.095) (0.093) (0.092

commune health center -0.033 -0.045 -0.048 -0.154 -0.170 -0.179 -0.182 -0.179

(0.029) (0.029) (0.033) (0.073) (0.061) (0.064) (0.065) (0.062

Poor household HI -0.013 -0.062 -0.058 -0.040 -0.081 -0.100 -0.145 -0.139

(0.039) (0.046) (0.055) (0.053) (0.048) (0.048) (0.066) (0.065

Priority group HI 0.107 0.103 0.085 0.092 0.073 0.062 -0.169 -0.143(0.026) (0.023) (0.036) (0.037) (0.039) (0.041) (0.080) (0.081

gender: female -0.037 -0.038 -0.027 -0.021 -0.035 -0.026 -0.087 -0.086

(0.022) (0.022) (0.028) (0.029) (0.030) (0.028) (0.041) (0.041

ethnic minority -0.057 -0.043 -0.042 -0.032 -0.069 -0.072 -0.057 -0.062

(0.033) (0.031) (0.043) (0.043) (0.053) (0.052) (0.059) (0.058Years in school -0.002 -0.004 -0.003 0.005 0.003 0.001 0.003

(0.003) (0.005) (0.005) (0.007) (0.007) (0.006) (0.007

ln(HH income per cap) -0.047 -0.040 -0.043 -0.083 -0.076 -0.066 -0.070

(0.021) (0.029) (0.029) (0.035) (0.034) (0.032) (0.033

any savings -0.052 -0.065 -0.059 -0.104 -0.114 -0.060 -0.071(0.036) (0.048) (0.049) (0.050) (0.050) (0.052) (0.055

ln(work hour) -0.045 -0.018 -0.010 -0.020 -0.025 -0.055 -0.045

(0.026) (0.015) (0.020) (0.021) (0.023) (0.027) (0.023

can read Kinh 0.102 0.102 0.116 0.061 0.043 0.009 -0.009

(0.048) (0.073) (0.071) (0.080) (0.085) (0.092) (0.102chronic disease 0.082 0.106 0.118

(0.039) (0.043) (0.047

severe illness -0.077 -0.055 -0.055(0.030) (0.028) (0.028

very severe illness 0.102 0.133 0.133(0.073) (0.067) (0.072

HI_poorcentral hosp 0.160 0.047(0.235) (0.261

HI_prioritycentral hosp 0.716 0.674

(0.236) (0.224

ln(work hour)cent hosp -0.050(0.053

Observations 704 704 704 704 697 697 697 697



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. . . . . . . . . . . . .Pattern of Health Insurance Utilization

Correcting the endogenous healthcare facility choice (Column (4))substantially increases the magnitude of the coefficient of central

hospital and commune health center.If a patient visits the central hospital, the probability of utilizing insurance willbe 25-30 percentage points lower than visiting the district hospitals.

Durbin-Wu-Hausman tests rejects the null hypothesis that these facilitychoice variables are exogenous (p-value of 0.078).

The low prospect of health insurance utilization at the central hospital

actually discourages people from visiting there.Patient with chronic disease are more likely to utilize insurance; patient

with severe illness are less likely to utilize the insurance, suggesting that

in the case of the severe illness, the patients prioritize the treatment, and

insurance utilization is the second matter. However, if the illness is very

severe, in which case the medical expenses could be huge, patients

seem to try to find a way to utilize the insurance.

The low insurance utilization at the central hospital is not due to the

health characteristics of the patients. Rather, once we control the health

and illness status, the insurance utilization at the central hospital is even

lower.



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. . . . . . . . . . . . .Pattern of Health Insurance Utilization

Our preferred specification is Column (7) as it allows the differential

patterns of insurance utilization across insurance policy at the central

hospital, which captures important variation in insurance utilization.

The negative coefficients on the working hours and the household

income would indicate that those whose time costs are higher are lesslikely to utilize the insurance. Consistent with the anecdote.

But the income and working hours little explains the high insurance

utilization rate of the priority group. When we include the interaction

terms of these variables with central hospital variable, the coefficient

changes little. So some other factors than working hours or income are

working for this population. Need further studies.



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. . . . . . . . . . . . .The magnitude of the effect of insurance nonuntilization

The magnitude of the effect of insurance nonuntilization

We have shown that the likelihood of insurance utilization is quite lowerat the central hospital, especially for the group other than the priority

group. But how important is the insurance nonutilization in terms of the

health expenditure?

For examining the effect of health insurance nonutilization on the health

expenditure, we use the self-reported health care expenditure which is

elicited by the question In total, how much did you pay for this visit?.

The drawback of this question is that it is not clear if the respondent

reports the health care expenditure net of health insurance

reimbursement.

It is likely that some respondents report the expenditure net of

reimbursement, and others report the gross health care expenditure.We use a second outcome variable which is obtained by subtracting the

amount of health insurance reimbursement elicited by the question How

much were you paid by health insurance in total at that time?. The true

value of the expenses should be somewhere between the first outcome

variable and the second one.



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The amount of the self-reported health care expenditure for the visit at the last

illness

count mean sdnot use HIlast illness: pay for the visit 78 1037730.8 3735050.8last illness: pay for examination 81 84252.1 406606.1last illness: pay for medication 83 639999.9 2731860.4last illness: pay for incentive money for health staff 81 28888.8 176167.5

last illness: pay for transport 82 52073.1 233920.9last illness: pay for other category 83 156024.0 690499.9use HIlast illness: pay for the visit 473 544564.5 3147995.1last illness: pay for examination 372 64089.8 578916.0last illness: pay for medication 387 217278.7 1317363.0last illness: pay for incentive money for health staff 385 13506.4 77600.2

last illness: pay for transport 383 58018.1 185152.1last illness: pay for other category 386 237745.9 1114456.1Totallast illness: pay for the visit 551 614377.5 3238389.6last illness: pay for examination 453 67694.9 551730.2last illness: pay for medication 470 291929.5 1661084.3last illness: pay for incentive money for health staff 466 16180.1 101716.5

last illness: pay for transport 465 56969.7 194371.7last illness: pay for other category 469 223283.4 1051787.0



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The amount of the self-reported health care expenditure for the visit at the last

illness

While almost half of those who used insurance paid nothing for the visit,more than a third of those who did not use insurance paid 100,001 -

500,000 VND.

The ratio of those who paid more than 1 million VND for the visit is also

higher for those who did not use the health insurance.

More than a forth of those who did not use the health insurance

eventually pay no less than 50,000 VND, in which case there is not somuch benefit for utilizing the health insurance.

.2692

.1795

.3462

.0513

.1154

.0385

.4672

.1839

.0698

.1395

.0465.074

.019

0

.5

0

.5

0 ~50k ~100k ~500k ~1,000k ~5,000k 5,000k~

not use HI

use HI

Density

a for visit Motivation and Research Question Data Empirical Results on Insurance Utilization Conclusion


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Econometric analysis

The characteristics of those who used the health insurance and those

who did not are different.

To estimate the average treatment effect on the treated of insurancenonutilization, we use the nearest neighbor matching and the regressionadjustment with propensity score weighting.

The latter is doubly robust in the sense that consistency of the estimatorsonly requires either the conditional mean model or the propensity scoremodel to be correctly specified, not both.

We include as the same set of the covariates used in the analysis ofinsurance nonutilization. Though these variables may not suffice toexplain the difference between the two groups, it is likely that theestimates are conservative ones.

If there remains some unobservables which affect the expenses, a majorfactor will be selection and moral hazard.People do not utilize insurance because their expenses are not so high.People who use insurance will receive more healthcare service as the costsare discounted.



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Impact of Insurance Nonutilization on Healthcare Expenditure

Columns (1) and (2) use the self-reported healthcare expenditure (In

total, how much did you pay for this visit?).Columns (3) and (4) use a second outcome variable which is obtained

by subtracting the amount of health insurance reimbursement elicited by

the question How much were you paid by health insurance in total at

that time?.

The true value of the effect of the health insurance nonutilization should

be somewhere between Columns (1) or (2) and Columns (3) or (4).

The estimated effect of insurance nonutilization on the healthcare

expenses is around 0.9-1.1 million VND, which is about 1.5 times higher

than the average of the healthcare expenses.

Table : Health care expenses for the visit

(1) (2) (3) (4)NNM Reg Adj PSW NNM Reg Adj PSW

HI nonutilization 843084.5*** 1084540* 974463.9*** 1181121*(198194.2) (571180.2) (187435.4) (659005.8)

Observations 549 124 549 124

Motivation and Research Question Data . . . . . . . . . . . . .Empirical Results on Insurance Utilization Conclusion


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Conclusion

Though many has been attempting to expand the coverage of the health

insurance, it may not be sufficient for protecting people fromhealth-related financial shocks. If insurance is not utilized or claims are

not admitted, having health insurance will be of no use.In Vietnam, insurance nonutilization is actually an issue. The likelihood ofinsurance utilization is significantly and substantially lower at the publiccentral hospital, which in turn discourages people from visiting there.

Probably due to the lack in incentives in overcrowded public hospitals?

In private facilities, they will concern attracting many patients to raise profit,and ensuring insurance utilization will help them increase the number ofpatients by providing discount for the medical fees.Staff in public facilities may not care for attracting more patients as it will notincrease their income. Further, more patients mean more work given thesame salary, and administrative works for insurance utilization put additionalworks. In crowded public facility, staff are already faced with a heavy

workload and thus tend to discriminate the insurees.The average effect of insurance nonutilization on the healthcare

expenses per visit is around 1 million VND, which is 1.5 times larger than

the average healthcare expenses per visit of our sample.

Barriers to insurance utilization may partly explain the mixed results of

health insurance on healthcare utilization and OOP payment across

countries.Self-tar etin ?? Tar et for those whose time costs are low.

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