Public Insurance and Demand for Private Healthcare

Titir Bhattacharya, Tanika Chakraborty and Prabal De

No 12370, CESifo Working Paper Series from CESifo

Abstract: Establishment of public–private partnerships is an emerging model in health care delivery. This study evaluates a pioneering social health insurance program in India that enables eligible households to access private hospitals for tertiary care services free of cost, but does not build more facilities. Leveraging policy discontinuities at state borders, we identify the program’s causal effects on utilization of private facilities and associated out-of-pocket expenditures. The results indicate a pronounced substitution effect induced by relative price changes: the program substantially increases the incidence of deliveries in private hospitals while significantly reducing out-of-pocket spending. However, we find no statistically significant effects on fertility or a key health outcome, infant mortality.

Keywords: public health insurance; public-private substitution; maternal and child health (search for similar items in EconPapers)
JEL-codes: I13 I18 J18 (search for similar items in EconPapers)
Date: 2025
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Persistent link: https://EconPapers.repec.org/RePEc:ces:ceswps:_12370

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