The Welfare Effect of Medical Insurance:Estimation based on Sufficient Statistics
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| Title | The Welfare Effect of Medical Insurance:Estimation based on Sufficient Statistics
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| Author | Zhao Shaoyang,Zang Wenbin and Yin Qinshuang |
| Organization | School of Economics, Sichuan University；Southwestern University of Finance and Economics |
| Email | zhaoshaoyang@scu.edu.cn；zangwenbin@swufe.edu.cn |
| Key Words | Medical Insurance；Demand for Medical Services；Difference in Difference; Sufficient statistic |
| Abstract | By constructing the individual utility and social welfare maximization model, we show that the optimal reimbursement rate can be expressed as a function of several sufficient statistics. We then could evaluate whether the current of China’s Urban Resident Basic Medical Insurance or URBMI and New Rural Basic Medical Insurance or NRBMI has reached the optimal reimbursement rate after estimating the sufficient statistics using data collected from a “natural experiment”. Our empirical analysis shows that the utilization of inpatient services will increase with the level of reimbursement rate if the reimbursement rate is relatively low, however, the utilization will remain unchanged if the reimbursement rate is relatively high. Interestingly, we find that that total medical expenditure will not be affected significantly by the increase in the reimbursement rate, but patient’s out-of-pocket expenditure will decrease. Using the parameters estimated from the empirical models, our results shows that the reimbursement rate of both URBMI and NRBMI is lower than the optimal level. |
| Serial Number | WP723 |
| Time | 2014-10-10 |
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