Medical care use and selection in a social health insurance with an equalization fund: evidence from Colombia

    Authors

    A. J. Trujillo

    Abbreviated Journal Title

    Health Econ.

    Keywords

    sickness fund; capitation; cream skimming; trivariate probit; DEMAND; IMPACT; VARIABLES; Economics; Health Care Sciences & Services; Health Policy & Services

    Abstract

    This paper studies the relationship between health status and insurance participation, and between insurance status and medical use in the context of a social health insurance with an equalization fund (SHIEF). Under this system, revenues from a mandatory payroll tax are collected into a single pool (equalization fund) that reimburses for-profit insurance companies according to a capitated formula. Although competition should induce insurers to control costs without reducing the quality of service necessary to attract consumers, limitations in the capitation formula might induce insurers to select against bad risks, and limitations in the contribution system might induce more healthy individuals to evade enrollment. A three-equation model having social health insurance, private health insurance, and using medical services is estimated using a 1997 Colombian household survey. Consistent with similar studies, participation in SHIEF increases medical care use. On the other hand, the evidence on selection is somewhat mixed: individuals who report good health status are more likely to participate in SHIEF, while those without a chronic condition are less likely to participate in SHIEF. Copyright (C) 2002 John Wiley Sons, Ltd.

    Journal Title

    Health Economics

    Volume

    12

    Issue/Number

    3

    Publication Date

    1-1-2003

    Document Type

    Article

    Language

    English

    First Page

    231

    Last Page

    246

    WOS Identifier

    WOS:000181478300005

    ISSN

    1057-9230

    Share

    COinS