High-Powered Incentives in Developing Country Health Insurance: Evidence from Colombia’s Régimen Subsidiado

Grant Miller, Diana M. Pinto and Marcos Vera-Hernandez ()

No 15456, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: Despite current emphasis on health insurance expansions in developing countries, inefficient consumer incentives for over-use of medical care are an important counterbalancing concern. However, three factors that are more acute in poor countries (credit constraints, principal-agent problems, and positive externalities) result in substantial under-use and misuse as well. This paper studies Colombia’s Régimen Subsidiado, the first major developing country effort to expand insurance in a way that purposefully addresses these inefficiencies. Using a regression discontinuity design, we find that Colombia’s insurance program has provided risk protection while substantially increasing the use of traditionally under-utilized preventive services (with measurable health gains) through high-powered supply-side incentives.

JEL-codes: I10 O10 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-cta, nep-ias and nep-mfd
Date: 2009-10
Note: CH HC HE
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