The moral dilemma of healthcare service utilization: a perspective from the consolidation of urban and rural resident health insurance policy in China

Patient moral hazard is a significant issue in healthcare system reform and a prominent factor affecting the efficiency of healthcare services in China. Based on the consolidation of urban and rural resident health insurance, this paper employs a staggered DID model to analyze the impact of patient moral hazard on the healthcare service utilization. The findings are as follows. First, the healthcare service utilization significantly increases after the consolidation of urban and rural resident health insurance. This conclusion remains robust when subjected to the placebo test, the mitigation of non-random policy effects, and the exclusion of other insurance type interference. Second, after considering the effects of patient healthcare demand release, supplier-induced demand, and collusion between doctors and patients, we find the evidence of patient moral hazard leading to increased healthcare service utilization. Third, patient moral hazard is mainly manifested in the heightened utilization of patients with general illnesses and middle income, indicating the phenomena of “over-treatment for minor ailments”. The study is limited by its focus on expanded reimbursement in urban and rural insurance consolidation, excluding details like fund management changes. Future research should incorporate more policy details and longer time horizons.