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Should I stay or should I go? Exit options within mixed systems of public and private health care finance

Neil Buckley (), Katherine Cuff (), Jeremiah Hurley, Stuart Mestelman (), Stephanie Thomas and David Cameron

Journal of Economic Behavior & Organization, 2016, vol. 131, issue PB, 62-77

Abstract: Mixed public–private finance is widespread in health care systems internationally. In one variant of mixed finance, some countries (e.g., Germany) allow eligible beneficiaries to fully exit from the public (social insurance) system and purchase private insurance. Using a controlled laboratory experiment, we empirically investigate the predictions of a political economy model of mixed systems of public and private finance with two types of exit: universal-exit, when all individuals can choose to exit the public system, and conditional-exit, when only individuals with an income at or above a threshold income level can choose to exit. We find that high-income individuals are less likely to exit under universal-exit than under conditional-exit, despite having the same incentive to exit in both treatments. Sensitivity treatments suggests that a number of factors may be at play in explaining this result, including learning effects, a priming effect and a framing effect, but that other-regarding preferences do not appear to be an important factor.

Keywords: Health care financing; Publicly provided private good; Mixed financing; Voting experiment; Framing effect (search for similar items in EconPapers)
JEL-codes: I1 H42 H44 C91 D7 (search for similar items in EconPapers)
Date: 2016
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Journal of Economic Behavior & Organization is currently edited by Houser, D. and Puzzello, D.

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Handle: RePEc:eee:jeborg:v:131:y:2016:i:pb:p:62-77