Public Insurance and Demand for Private Healthcare

Titir Bhattacharya (), Tanika Chakraborty () and Prabal K. De ()
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Titir Bhattacharya: University of Warwick
Tanika Chakraborty: Indian Institute of Management
Prabal K. De: City College of New York

No 18349, IZA Discussion Papers from Institute of Labor Economics (IZA)

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. %and may give rise to moral hazard behavior.

Keywords: maternal and child health; public-private substitution; public health insurance (search for similar items in EconPapers)
JEL-codes: I13 I18 J18 (search for similar items in EconPapers)
Date: 2025-12
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