Supplemental Health Insurance and Healthcare Consumption: A Dynamic Approach to Moral Hazard

Carine Franc (), Marc Perronnin () and Aurelie Pierre ()
Additional contact information
Carine Franc: CERMES centre de recherche medecine, sciences, sante et societe
Marc Perronnin: IRDES Institute for research and information in health economics
Aurelie Pierre: IRDES Institute for research and information in health economics

No DT58, Working Papers from IRDES institut for research and information in health economics

Abstract: We analyze the existence and persistence of moral hazard over time to test the assumption of pent-up demand. We consider the effects of supplemental health insurance provided by a private insurer when added to compulsory public insurance already supplemented by private insurance. Using panel data from a French mutuelle, we compute error component models with the Chamberlain specification to control for adverse selection. By separating outpatient care consumption into (1) the probability of healthcare use, (2) the number of uses conditional on use and (3) the per-unit cost of care, we provide evidence that supplemental insurance is significantly and positively associated with (1), (2) and (3). However, these effects decrease significantly over time. This pattern supports the existence of pent-up demand, the magnitude of which varies greatly and depends on the dimensions (1), (2) and (3) and the type of care (physician care, prescription drugs, dental care or optical care)..

Keywords: Supplemental health insurance; moral hazard; health care expenditures; longitudinal analysis (search for similar items in EconPapers)
JEL-codes: D82 I13 (search for similar items in EconPapers)
Pages: 24 pages
Date: 2014-01, Revised 2014-01
New Economics Papers: this item is included in nep-cta, nep-hea and nep-ias
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (4)

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