The responses of physicians to a fall in demand for voluntary private health insurance

Anthony Scott (), Susan Méndez () and Jongsay Yong ()
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Anthony Scott: Centre for Health Economics, Monash Business School, Monash University
Susan Méndez: Melbourne Institute: Applied Economic and Social Research, The University of Melbourne
Jongsay Yong: Melbourne Institute: Applied Economic and Social Research, The University of Melbourne

No 2025-14, Working Papers from Centre for Health Economics, Monash University

Abstract: This paper examines the impact of a fall in demand for voluntary private health insurance on physician behaviour. We find that dual practice physicians who earned more revenue from working in private hospitals before the fall in demand for PHI were more likely to experience a fall in the volume of private hospital care and a less complex mix of in-hospital services provided. Risk-averse doctors drove this reduction in complexity. There was weak evidence suggesting that doctors compensated for the fall in volume by increasing their working hours in public hospitals and reducing fees for in-hospital services. We found no evidence of higher volumes of care in out-of-hospital visits to compensate for the lower in-hospital volumes, but some weak evidence of claiming for more complex and costly out-of-hospital services, which we interpret as upcoding. Compensatory behaviours were small and primarily observed among risk- averse male doctors with low conscientiousness, from non-surgical specialties, and located in areas with lower doctor density.

Keywords: health insurance; physician behaviour (search for similar items in EconPapers)
JEL-codes: I11 I13 J44 (search for similar items in EconPapers)
Date: 2025-09
New Economics Papers: this item is included in nep-lma
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