IDEAS home Printed from https://ideas.repec.org/p/nbr/nberwo/30996.html
   My bibliography  Save this paper

The Prices in the Crises: What We Are Learning from Twenty Years of Health Insurance in Low- and Middle-Income Countries

Author

Listed:
  • Jishnu Das
  • Quy-Toan Do

Abstract

Governments in many low- and middle-income countries are developing health insurance products as a complement to tax-funded, subsidized provision of health care through publicly operated facilities. This paper discusses two rationales for this transition. First, health insurance would boost fiscal revenues for health care, as post-treatment out-of-pocket payments to providers would be replaced by pre-treatment insurance premia to health ministries. Second, increased patient choice and carefully designed physician reimbursements would increase quality in the health care sector. This essay shows that, at best, these objectives have only been partially met. Despite evidence that health insurance has provided financial protection, consumers are not willing to pay for unsubsidized premia. Health outcomes have not improved despite an increase in utilization. We argue that this is not because there was no room to improve the quality of care but because behavioral responses among health care providers have systematically undermined the objectives of these insurance schemes.

Suggested Citation

  • Jishnu Das & Quy-Toan Do, 2023. "The Prices in the Crises: What We Are Learning from Twenty Years of Health Insurance in Low- and Middle-Income Countries," NBER Working Papers 30996, National Bureau of Economic Research, Inc.
  • Handle: RePEc:nbr:nberwo:30996
    Note: DEV EH
    as

    Download full text from publisher

    File URL: http://www.nber.org/papers/w30996.pdf
    Download Restriction: no
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. Joseph J. Capuno & Aleli D. Kraft & Stella Quimbo & Carlos R. Tan & Adam Wagstaff, 2016. "Effects of Price, Information, and Transactions Cost Interventions to Raise Voluntary Enrollment in a Social Health Insurance Scheme: A Randomized Experiment in the Philippines," Health Economics, John Wiley & Sons, Ltd., vol. 25(6), pages 650-662, June.
    2. Bernal, Noelia & Carpio, Miguel A. & Klein, Tobias J., 2017. "The effects of access to health insurance: Evidence from a regression discontinuity design in Peru," Journal of Public Economics, Elsevier, vol. 154(C), pages 122-136.
    3. Powell-Jackson, Timothy & Hanson, Kara & Whitty, Christopher J.M. & Ansah, Evelyn K., 2014. "Who benefits from free healthcare? Evidence from a randomized experiment in Ghana," Journal of Development Economics, Elsevier, vol. 107(C), pages 305-319.
    4. François Cohen & Antoine Dechezleprêtre, 2022. "Mortality, Temperature, and Public Health Provision: Evidence from Mexico," American Economic Journal: Economic Policy, American Economic Association, vol. 14(2), pages 161-192, May.
    5. Mæstad, Ottar & Torsvik, Gaute & Aakvik, Arild, 2010. "Overworked? On the relationship between workload and health worker performance," Journal of Health Economics, Elsevier, vol. 29(5), pages 686-698, September.
    6. Xiaoyun Liang & Hong Guo & Chenggang Jin & Xiaoxia Peng & Xiulan Zhang, 2012. "The Effect of New Cooperative Medical Scheme on Health Outcomes and Alleviating Catastrophic Health Expenditure in China: A Systematic Review," PLOS ONE, Public Library of Science, vol. 7(8), pages 1-11, August.
    7. Leonard, Kenneth & Masatu, Melkiory C., 2006. "Outpatient process quality evaluation and the Hawthorne Effect," Social Science & Medicine, Elsevier, vol. 63(9), pages 2330-2340, November.
    8. Adam Wagstaff & Ha Thi Hong Nguyen & Huyen Dao & Sarah Bales, 2016. "Encouraging Health Insurance for the Informal Sector: A Cluster Randomized Experiment in Vietnam," Health Economics, John Wiley & Sons, Ltd., vol. 25(6), pages 663-674, June.
    9. Amitabh Chandra & Amy Finkelstein & Adam Sacarny & Chad Syverson, 2016. "Health Care Exceptionalism? Performance and Allocation in the US Health Care Sector," American Economic Review, American Economic Association, vol. 106(8), pages 2110-2144, August.
    10. Kovacs, Roxanne & Lagarde, Mylene, 2022. "Does high workload reduce the quality of healthcare? Evidence from rural Senegal," Journal of Health Economics, Elsevier, vol. 82(C).
    11. Hubert Amu & Kwamena Sekyi Dickson & Kenneth Setorwu Adde & Kwaku Kissah-Korsah & Eugene Kofuor Maafo Darteh & Akwasi Kumi-Kyereme, 2022. "Prevalence and factors associated with health insurance coverage in urban sub-Saharan Africa: Multilevel analyses of demographic and health survey data," PLOS ONE, Public Library of Science, vol. 17(3), pages 1-14, March.
    12. Grant Miller & Diana Pinto & Marcos Vera-Hernández, 2013. "Risk Protection, Service Use, and Health Outcomes under Colombia's Health Insurance Program for the Poor," American Economic Journal: Applied Economics, American Economic Association, vol. 5(4), pages 61-91, October.
    13. Ana I. Balsa & Patricia Triunfo, 2021. "The effects of expanded social health insurance on young mothers: Lessons from a pro‐choice reform in Uruguay," Health Economics, John Wiley & Sons, Ltd., vol. 30(3), pages 603-622, March.
    14. Sebastian Bauhoff & David R. Hotchkiss & Owen Smith, 2011. "The impact of medical insurance for the poor in Georgia: a regression discontinuity approach," Health Economics, John Wiley & Sons, Ltd., vol. 20(11), pages 1362-1378, November.
    15. Rebecca L. Thornton & Laurel E. Hatt & Erica M. Field & Mursaleena Islam & Freddy Solís Diaz & Martha Azucena González, 2010. "Social security health insurance for the informal sector in Nicaragua: a randomized evaluation," Health Economics, John Wiley & Sons, Ltd., vol. 19(S1), pages 181-206, September.
    16. Currie, Janet & Lin, Wanchuan & Meng, Juanjuan, 2014. "Addressing antibiotic abuse in China: An experimental audit study," Journal of Development Economics, Elsevier, vol. 110(C), pages 39-51.
    17. Wameq A. Raza & Ellen van de Poel & Arjun Bedi & Frans Rutten, 2016. "Impact of Community‐based Health Insurance on Access and Financial Protection: Evidence from Three Randomized Control Trials in Rural India," Health Economics, John Wiley & Sons, Ltd., vol. 25(6), pages 675-687, June.
    18. Spence, Michael & Zeckhauser, Richard, 1971. "Insurance, Information, and Individual Action," American Economic Review, American Economic Association, vol. 61(2), pages 380-387, May.
    19. Lu, Fangwen, 2014. "Insurance coverage and agency problems in doctor prescriptions: Evidence from a field experiment in China," Journal of Development Economics, Elsevier, vol. 106(C), pages 156-167.
    20. Das, Jishnu & Hammer, Jeffrey, 2007. "Money for nothing: The dire straits of medical practice in Delhi, India," Journal of Development Economics, Elsevier, vol. 83(1), pages 1-36, May.
    21. Anne Fitzpatrick & Rebecca Thornton, 2019. "The Effects of Health Insurance within Families: Experimental Evidence from Nicaragua," The World Bank Economic Review, World Bank, vol. 33(3), pages 736-749.
    22. Kenneth L. Leonard & Melkiory C. Masatu & Alexandre Vialou, 2007. "Getting Doctors to Do Their Best: The Roles of Ability and Motivation in Health Care Quality," Journal of Human Resources, University of Wisconsin Press, vol. 42(3).
    23. Kovacs, Roxanne J. & Lagarde, Mylene & Cairns, John, 2020. "Overconfident health workers provide lower quality healthcare," Journal of Economic Psychology, Elsevier, vol. 76(C).
    24. Kovacs, Roxanne J. & Lagarde, Mylène, 2022. "Does high workload reduce the quality of healthcare? Evidence from rural Senegal," LSE Research Online Documents on Economics 113759, London School of Economics and Political Science, LSE Library.
    25. Spenkuch, Jörg L., 2012. "Moral hazard and selection among the poor: Evidence from a randomized experiment," Journal of Health Economics, Elsevier, vol. 31(1), pages 72-85.
    26. Kovacs, Roxanne J. & Lagarde, Mylene & Cairns, John, 2020. "Overconfident health workers provide lower quality healthcare," LSE Research Online Documents on Economics 102673, London School of Economics and Political Science, LSE Library.
    27. Amy Finkelstein & Nathaniel Hendren & Erzo F. P. Luttmer, 2019. "The Value of Medicaid: Interpreting Results from the Oregon Health Insurance Experiment," Journal of Political Economy, University of Chicago Press, vol. 127(6), pages 2836-2874.
    28. Sendhil Mullainathan & Ziad Obermeyer, 2022. "Diagnosing Physician Error: A Machine Learning Approach to Low-Value Health Care [“The Determinants of Productivity in Medical Testing: Intensity and Allocation of Care,”]," The Quarterly Journal of Economics, Oxford University Press, vol. 137(2), pages 679-727.
    29. Levine, David & Polimeni, Rachel & Ramage, Ian, 2016. "Insuring health or insuring wealth? An experimental evaluation of health insurance in rural Cambodia," Journal of Development Economics, Elsevier, vol. 119(C), pages 1-15.
    30. Abhijit Banerjee & Amy Finkelstein & Rema Hanna & Benjamin A. Olken & Arianna Ornaghi & Sudarno Sumarto, 2021. "The Challenges of Universal Health Insurance in Developing Countries: Experimental Evidence from Indonesia's National Health Insurance," American Economic Review, American Economic Association, vol. 111(9), pages 3035-3063, September.
    31. Karan, Anup & Yip, Winnie & Mahal, Ajay, 2017. "Extending health insurance to the poor in India: An impact evaluation of Rashtriya Swasthya Bima Yojana on out of pocket spending for healthcare," Social Science & Medicine, Elsevier, vol. 181(C), pages 83-92.
    32. Bernal Lobato, Noelia & Carpio, M.A. & Klein, Tobias, 2017. "The effects of access to health insurance: Evidence from a regression discontinuity design in Peru," Other publications TiSEM 215d796f-09fd-4231-a02d-1, Tilburg University, School of Economics and Management.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Alina Imping & Andreas Landmann & Lisa Rogge, 2024. "Measuring Medical and Cost Uncertainty in Health Care Seeking: Instrument Design and Validation," Working Papers 236, Bavarian Graduate Program in Economics (BGPE).
    2. O'Donnell, Owen, 2024. "Health and health system effects on poverty: A narrative review of global evidence," Health Policy, Elsevier, vol. 142(C).
    3. Bancalari, Antonella & Berlinski, Samuel & Buitrago, Giancarlo & García, María Fernanda & Mata, Dolores de la & Vera-Hernández, Marcos, 2023. "Health Systems and Health Inequalities in Latin America," IDB Publications (Working Papers) 13196, Inter-American Development Bank.
    4. Benjamin A. Olken & Rema Hanna & Phitawat Poonpolkul & Nada Wasi, 2024. "Willingness-To-Pay vs Administrative Hurdles: Understanding Barriers to Social Insurance Enrollment in Thailand," PIER Discussion Papers 223, Puey Ungphakorn Institute for Economic Research.
    5. Jacky Mathonnat, 2024. "« Transforming Challenge into Action: Expanding Health Coverage for All » at the World Bank Group and IMF Spring Meetings 2024," Post-Print hal-04603235, HAL.
    6. Boutin, Delphine & Petifour, Laurene & Allard, Yvonne & Kontoubré, Souleymane & Ridde, Valéry, 2024. "Comprehensive Assessment of the Impact of Mandatory Community-Based Health Insurance in Burkina Faso," IZA Discussion Papers 17094, Institute of Labor Economics (IZA).

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. O'Donnell, Owen, 2024. "Health and health system effects on poverty: A narrative review of global evidence," Health Policy, Elsevier, vol. 142(C).
    2. Darius Erlangga & Marc Suhrcke & Shehzad Ali & Karen Bloor, 2019. "The impact of public health insurance on health care utilisation, financial protection and health status in low- and middle-income countries: A systematic review," PLOS ONE, Public Library of Science, vol. 14(8), pages 1-20, August.
    3. Gabriella Conti & Rita Ginja, 2023. "Who Benefits from Free Health Insurance?: Evidence from Mexico," Journal of Human Resources, University of Wisconsin Press, vol. 58(1), pages 146-182.
    4. Emily Gustafsson-Wright & Gosia Popławska & Zlata Tanović & Jacques Gaag, 2018. "The impact of subsidized private health insurance and health facility upgrades on healthcare utilization and spending in rural Nigeria," International Journal of Health Economics and Management, Springer, vol. 18(3), pages 221-276, September.
    5. Sven Neelsen & Owen O'Donnell, 2017. "Progressive universalism? The impact of targeted coverage on health care access and expenditures in Peru," Health Economics, John Wiley & Sons, Ltd., vol. 26(12), pages 179-203, December.
    6. Kovacs, Roxanne & Lagarde, Mylene, 2022. "Does high workload reduce the quality of healthcare? Evidence from rural Senegal," Journal of Health Economics, Elsevier, vol. 82(C).
    7. Patrick Opoku Asuming & Hyuncheol Bryant Kim & Armand Sim, 2024. "Selection and behavioral responses of health insurance subsidies in the long run: Evidence from a field experiment in Ghana," Health Economics, John Wiley & Sons, Ltd., vol. 33(5), pages 992-1032, May.
    8. Patrick Opoku Asuming & Hyuncheol Bryant Kim & Armand Sim, 2024. "Selection and behavioral responses of health insurance subsidies in the long run: Evidence from a field experiment in Ghana," Health Economics, John Wiley & Sons, Ltd., vol. 33(5), pages 992-1032, May.
    9. Kovacs, Roxanne J. & Lagarde, Mylène, 2022. "Does high workload reduce the quality of healthcare? Evidence from rural Senegal," LSE Research Online Documents on Economics 113759, London School of Economics and Political Science, LSE Library.
    10. Hartwig, Renate & Japaridze, Dimitri & Khetsuriani, Nana & Vollmer, Sebastian, 2024. "Information signal and medical diagnosis: Audit study evidence from Georgia," Ruhr Economic Papers 1112, RWI - Leibniz-Institut für Wirtschaftsforschung, Ruhr-University Bochum, TU Dortmund University, University of Duisburg-Essen.
    11. Anup Malani & Cynthia Kinnan & Gabriella Conti & Kosuke Imai & Morgen Miller & Shailender Swaminathan & Alessandra Voena & Bartosz Woda, 2024. "Evaluating pricing health insurance in lower-income countries: A field experiment in India," IFS Working Papers W24/33, Institute for Fiscal Studies.
    12. Mengna Luan & Wenjing Shi & Zhigang Tao & Hongjie Yuan, 2023. "When patients have better insurance coverage in China: Provider incentives, costs, and quality of care," Economics of Transition and Institutional Change, John Wiley & Sons, vol. 31(4), pages 1073-1106, October.
    13. Bancalari, Antonella & Berlinski, Samuel & Buitrago, Giancarlo & García, María Fernanda & Mata, Dolores de la & Vera-Hernández, Marcos, 2023. "Health Inequalities in Latin American and the Caribbean: Child, Adolescent, Reproductive, Metabolic Syndrome and Mental Health," IDB Publications (Working Papers) 13158, Inter-American Development Bank.
    14. Malani, Anup & Kinnan, Cynthia & Conti, Gabriella & Imai, Kosuke & Miller, Morgen & Swaminathan, Shailender & Voena, Alessandra & Woda, Bartek, 2024. "Evaluating and pricing health insurance in lower-income countries: A field experiment in India," CEPR Discussion Papers 19326, C.E.P.R. Discussion Papers.
    15. Boutin, Delphine & Petifour, Laurene & Allard, Yvonne & Kontoubré, Souleymane & Ridde, Valéry, 2024. "Comprehensive Assessment of the Impact of Mandatory Community-Based Health Insurance in Burkina Faso," IZA Discussion Papers 17094, Institute of Labor Economics (IZA).
    16. Cesur, Resul & Güneş, Pınar Mine & Tekin, Erdal & Ulker, Aydogan, 2017. "The value of socialized medicine: The impact of universal primary healthcare provision on mortality rates in Turkey," Journal of Public Economics, Elsevier, vol. 150(C), pages 75-93.
    17. Bernal, Noelia & Costa-Font, Joan & Ritter, Patricia, 2022. "The Effect of Health Insurance on Child Nutritional Outcomes. Evidence from a Regression Discontinuity Design in Peru," IZA Discussion Papers 15490, Institute of Labor Economics (IZA).
    18. Abhijit Banerjee & Amy Finkelstein & Rema Hanna & Benjamin A. Olken & Arianna Ornaghi & Sudarno Sumarto, 2019. "The Challenges of Universal Health Insurance in Developing Countries: Evidence from a Large-scale Randomized Experiment in Indonesia," NBER Working Papers 26204, National Bureau of Economic Research, Inc.
    19. Banerjee, Abhijit & Finkelstein, Amy & Hanna, Rema & Olken, Benjamin & Ornaghi, Arianna & Sumarto, Sudarno, 2020. "Subsidies and the Dynamics of Selection:Experimental Evidence from Indonesia's National Health Insurance," CAGE Online Working Paper Series 454, Competitive Advantage in the Global Economy (CAGE).
    20. Patrick Asuming & Hyuncheol Bryant Kim & Armand Sim, 2018. "Long-run Consequences of Health Insurance Promotion When Mandates are Not Enforceable: Evidence from a Field Experiment in Ghana," Papers 1811.09004, arXiv.org, revised Jun 2019.

    More about this item

    JEL classification:

    • I11 - Health, Education, and Welfare - - Health - - - Analysis of Health Care Markets
    • I12 - Health, Education, and Welfare - - Health - - - Health Behavior
    • I13 - Health, Education, and Welfare - - Health - - - Health Insurance, Public and Private
    • I15 - Health, Education, and Welfare - - Health - - - Health and Economic Development
    • O12 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Microeconomic Analyses of Economic Development

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:nbr:nberwo:30996. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: the person in charge (email available below). General contact details of provider: https://edirc.repec.org/data/nberrus.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.