Medical Insurance Coverage and Health Production Efficiency

Laurie J. Bates, Kankana Mukherjee and Rexford Santerre ()

Journal of Risk & Insurance, 2010, vol. 77, issue 1, 211-229

Abstract: Conventional economic theory predicts that medical insurance coverage causes an inefficient production of health because of ex ante and ex post moral hazard effects. However, no research has empirically examined the magnitude of the inefficiency. This study empirically examines the impact of medical insurance on the technical efficiency of health production at the metropolitan level. The underlying health production function allows for preventive care, curative care, and behavioral factors. Data envelopment analysis determines relative technical efficiency. The multiple regression results indicate that insurance coverage generates inefficiency but the efficiency loss appears to be relatively small on the extensive margin.

Date: 2010
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https://doi.org/10.1111/j.1539-6975.2009.01336.x

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Persistent link: https://EconPapers.repec.org/RePEc:bla:jrinsu:v:77:y:2010:i:1:p:211-229

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