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Inefficiencies in the Japanese National Health Insurance system: A stochastic frontier approach

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  • Yuda, Michio

Abstract

In this study, I examine the cost inefficiency and production inefficiency of municipal insurers operating under the Japanese National Health Insurance system. I employ insurer-level panel data for 2005 and 2010 and adopt stochastic frontier cost and production models to overcome analytical problems encountered in previous studies. The cost frontier estimates indicate that adverse effects on efficiency are associated with aging of the insured population, soft budget constraints due to government subsidies, insurer contributions to the elder care systems, and an increase in care provider densities. A positive effect on efficiency is associated with an expansion in insurer scale. The production frontier estimates suggest that cost inefficiencies decreased by roughly 15 percent between 2005 and 2010. The correlation between cost inefficiency and technical inefficiency is not particularly strong, whereas the correlation between cost inefficiency and allocative inefficiency is strong and positive.

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  • Yuda, Michio, 2016. "Inefficiencies in the Japanese National Health Insurance system: A stochastic frontier approach," Journal of Asian Economics, Elsevier, vol. 42(C), pages 65-77.
    • Handle: RePEc:eee:asieco:v:42:y:2016:i:c:p:65-77
    DOI: 10.1016/j.asieco.2016.01.001
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    References listed on IDEAS

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    Cited by:

    1. Zhou, Sheng & Xu, Zhiwei, 2022. "Energy efficiency assessment of RCEP member states: A three-stage slack based measurement DEA with undesirable outputs," Energy, Elsevier, vol. 253(C).

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    More about this item

    Keywords

    Cost inefficiency; Decomposition of cost inefficiency; Stochastic frontier model; Japanese National Health Insurance system; Japan;
    All these keywords.

    JEL classification:

    • C31 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Cross-Sectional Models; Spatial Models; Treatment Effect Models; Quantile Regressions; Social Interaction Models
    • H71 - Public Economics - - State and Local Government; Intergovernmental Relations - - - State and Local Taxation, Subsidies, and Revenue
    • H72 - Public Economics - - State and Local Government; Intergovernmental Relations - - - State and Local Budget and Expenditures
    • H75 - Public Economics - - State and Local Government; Intergovernmental Relations - - - State and Local Government: Health, Education, and Welfare
    • I1 - Health, Education, and Welfare - - Health
    • I13 - Health, Education, and Welfare - - Health - - - Health Insurance, Public and Private

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