Does Devolution Alter the Choice of Public versus Private Health Care?

Joan Costa-Font and Ada Ferrer-i-Carbonell

Health, Econometrics and Data Group (HEDG) Working Papers from HEDG, c/o Department of Economics, University of York

Abstract: Government decentralisation (GD) can provide an alternative to the ‘build in’ accountability mechanism of markets by influencing the choice of and preference for public versus private health care. To test this hypothesis, this paper exploits the gradual decentralisation of the political stewardship of the Spanish National Health System (NHS) to study the effect of GD on the individual choice of public (NHS) and private health care drawing on a difference-in-differences design. We find that ‘turning on’ the decentralization treatment (abandoning centralised governance) increases the preference for public health care (NHS) compared to control regions that did not exhibit any major change in the health care governance in the least a decade. Specifically, we find that GD increases the perceptions of, satisfaction with, and preference for the NHS. Consistently, we also find that the GD reduces the uptake of private health insurance among higher income and education groups. The effects are mainly driven by improvements in health care quality as well as policy innovation and diffusion.

Keywords: devolution; National Health Service (NHS); private health care; private health insurance; health system satisfaction; health care quality (search for similar items in EconPapers)
JEL-codes: H7 I18 (search for similar items in EconPapers)
Date: 2021-09
New Economics Papers: this item is included in nep-eur, nep-ias and nep-isf
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Related works:
Journal Article: Does devolution influence the choice and quality of public (vs private) health care? (2022)
Working Paper: Does Devolution Alter the Choice of Public versus Private Health Care? (2021)
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