Adam Wagstaff Development Research Group & East Asia HD, The World Bank

1. Photos from Hans Kemp Health insurance for the poor in Vietnam An impact evaluation of Vietnam’s health insurance program Adam Wagstaff Development Research Group & East Asia HD, The World Bank

2. Introduction • Policy and program issues: • Lack of health insurance in China and Vietnam following de-collectivization of agriculture • New policy of public finance of free health care for the poor by enrolling them in social insurance • Substantive issues: • Health insurance literature focuses on negative • Paper looks at risk-reduction associated with HI, and positive consequences from it • Methodological issues: • Paper uses propensity score matching (PSM) with pre- and post-intervention data to estimate impact of health insurance • Empirical findings & policy implications

3. Policy issues Policy/institutional issues • In China and Vietnam, cooperative health insurance collapsed after de-collectivization of agriculture • In both countries concern over affordability of health care, esp. among rural poor • People encouraged to enroll in Vietnam’s health insurance (VHI) program—compulsory for certain groups • Decision 139 mandates and supports provinces to enroll poor in VHI (or make alternative arrangements for them) • What will impact of enrollment among 139 beneficiaries be on key outcomes?

4. Policy issues Costly care, high spending

5. Policy issues Impoverishing too

6. Policy issues Impoverishing too Out-of-pocket payments for health care pushed 2.6m Vietnamese into poverty in 1998. Increased headcount by 23% and poverty gap by 25%

7. Policy issues VHI before decision 139 • Set up in 1993, reformed in 1999 • Compulsory scheme for formal sector workers, civil servants, etc. • Voluntary scheme—currently attracts mostly school kids & students • By 1998, 15% enrolled; 60% compulsorily • Coverage against inpatient costs, & fees incurred in outpatient care; less generous coverage for voluntary members

8. Policy issues How decision 139 will change coverage

9. Substantive issues Health insurance issues • Much of the health insurance literature emphasizes the negative: • Moral hazard • Adverse selection • Recent work emphasizes: • Risk-reduction benefits of insurance, and positive consequences of this • Lower precautionary savings • Better health outcomes • Difficulty of measuring true moral hazard

10. Methodological issues Evaluation with non-experimental data Difference = effect of treatment on treated Difference = bias

11. Methodological issues Propensity score matching as approach to reducing bias

12. Empirical results Data & variables • Data from Vietnam Living Standards Survey • High proportion of HHs interviewed in 1993 were re-interviewed in 1998 • Outcomes variables • Contact probability • Volume of services used (1998 data only, so can do only single difference PSM) • Out-of-pocket payments • Non-medical HH spending • Child health, measured through anthropometrics (underweight, etc.)

13. Empirical results Probit model for participation • VHI enrollment depends on • Whether in school (+) • Employed: • Communist party, government, army, social organization, state-owned company (+) • Private company (-) • Income (+) • Education (+) • Urban (+) • Commune fixed effects

14. Empirical results Descriptives of probability, before & after matching

15. Empirical results Histograms of probabilities, before and after matching Uninsured Insured

16. Empirical results PSM results #1 (DD & SD) DD=double difference; SD=single difference

17. Empirical results PSM results #2 (SD)

18. PSM useful for program evaluation—use panel data and diffs-in-diffs estimator if possible VHI increases contact probability, volume of use No impact on out-of-pocket payments Effect on non-medical consumption—reflects risk reduction? For hospital care, smallest impact of VHI among the poor Extrapolation to “139” difficult—poorest quintile estimates most relevant; but NB no copayments Conclusions