Supplementary private health insurance: the impact of physician financial incentives on medical practice

Carine Milcent () and Saad Zbiri
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Carine Milcent: PSE - Paris School of Economics - UP1 - Université Paris 1 Panthéon-Sorbonne - ENS-PSL - École normale supérieure - Paris - PSL - Université Paris Sciences et Lettres - EHESS - École des hautes études en sciences sociales - ENPC - École nationale des ponts et chaussées - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement, PJSE - Paris Jourdan Sciences Economiques - UP1 - Université Paris 1 Panthéon-Sorbonne - ENS-PSL - École normale supérieure - Paris - PSL - Université Paris Sciences et Lettres - EHESS - École des hautes études en sciences sociales - ENPC - École nationale des ponts et chaussées - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement
Saad Zbiri: RISCQ - Risques cliniques et sécurité en santé des femmes et en santé périnatale - UVSQ - Université de Versailles Saint-Quentin-en-Yvelines

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Abstract: In the French DRG-based payment system, both private and public hospitals are financed by a public single-payer. Public hospitals are overcrowded and have no direct financial incentives to choose one procedure over another. If a patient has a strong preference, they can switch to a private hospital. In private hospitals, the preference does come into play, but the patient has to pay for the additional cost, for which they are reimbursed if they have supplementary private health insurance. Do financial incentives from the fees received by physicians for different procedures drive their behavior? Using French exhaustive data on delivery, we find that private hospitals perform significantly more cesarean deliveries than public hospitals.However, for patients without private health insurance, the two sectors differ much less in terms of cesareans rate. We determine the impact of the financial incentive for patients who can afford the additional cost. Affordability is mainly ensured by the reimbursement of costs by private health insurance. These findings can be interpreted as evidence that, in healthcare systems where a public single-payer offers universal coverage, the presence of supplementary private insurance can contribute to creating incentives on the supply side and lead to practices and an allocation of resources that are not optimal from a social welfare perspective.

Keywords: Cesarean delivery.; DGR-based payment; Public healthcare system; Physician financial incentives; Supplementary private health insurance (search for similar items in EconPapers)
Date: 2021
Note: View the original document on HAL open archive server: https://hal.science/hal-05724521v1
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Published in Health Economics, 2021, 31 (1), pp.57-72. ⟨10.1002/hec.4443⟩

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Persistent link: https://EconPapers.repec.org/RePEc:hal:pseptp:hal-05724521

DOI: 10.1002/hec.4443

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