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INDIVIDUAL DEMAND FOR HEALTH INSURANCE WHEN HEALTH CARE IS WIDELY ACCESSIBLE. Arpah Abu- Bakar , Angappan Regupathi , Syed M Aljunid. 2013 China International Conference on Insurance and Risk Management 17-20 July Kunming, China. OUTLINE. Motivation of the Study Research Objectives

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individual demand for health insurance when health care is widely accessible

INDIVIDUALDEMAND FOR HEALTH INSURANCE WHEN HEALTH CARE IS WIDELY ACCESSIBLE

Arpah Abu-Bakar, AngappanRegupathi, Syed M Aljunid

2013 China International Conference on Insurance and Risk Management 17-20 July Kunming, China

outline
OUTLINE
  • Motivation of the Study
  • Research Objectives
  • Hypotheses
  • Research Methodology
  • Findings
  • Conclusion and Recommendations
motivation
Motivation
  • Why Individual Demand?
    • Most previous studies focus on household demand
  • Why Malaysia?
    • Different Health Care System
      • Public Health Care is Widely Accessible but
      • High private spending on health care [OOP cost is the highest source of financing]
    • Multi-ethnicity & Multi-religion Society
motivation1
Motivation
  • Why Current Empirical Evidence?
    • The Government is looking for a mechanism to reduce its financing burden
      • “…health financing scheme to meet health care cost.” (7th Malaysia Plan)
      • “provide consumer with a wider choice in the purchase of health services from both the public and private sector.” (8th Malaysia Plan)
      • Towards achieving better health through consolidation of services…between the public and private sectors (9th Malaysia Plan)
      • Promoting private health care. (10th Malaysia Plan)
objectives
Objectives
  • To determine the factors that affect the individual demand for private health insurance
  • To predict the likelihood of a person buying health insurance, given the person’s characteristics
slide7
DATA
  • National Health & Morbidity Survey III; Cross sectional data (2006)
  • Data Screening
    • 34,539 respondents answered Module B, 18.8% owned some type of MHI
      • Module B: Health Expenditure, Hospitalization, Private Health Insurance
    • 14,233 cases with no missing values; Split to two data set. Further split into Salaried & Non-salaried individuals
    • N = 4997 to fit the model and N = 5119 to test the model
methods
METHODS
  • Unit of Analysis
    • An individual who can purchase health insurance for him/herself
  • Logistic Regression
    • DV – Either own or do not own HI
    • Base Category - Malay male individuals, not married, have good health, live in urban area. Have tertiary education and work in the public sector.
race religion
Race-Religion

Original Categories for Race and Religion

Malays

Non-Malay Muslims

Non-Muslims

risk attitude

Risk Attitude Scales for Safety Behaviors

Risk Attitude

Smokers vs Non Smokers

Safety Behaviors

performance criteria
Performance Criteria

Classification table

64.6% of individuals correctly classified as owners

78.9% of individuals correctly classified as non-owners

Hosmer and LemeshowTest

Chi-Square is not significant

Cox & Snell’s R sq = .217; Nagelkerke R sq = .316

prediction model
Prediction Model
  • Reduced-Form Model
  • Measure the Predictive Power of the Model using the 2nd half of the data set
  • Chi-square test shows that there is a significant association between the predicted purchased of HI and the actual purchase of HI
  • This model is useful for predicting potential HI buyers
conclusion
CONCLUSION
  • Those who are likely to buyare high income earners, older and more educated individuals, female, non-Muslims, public servants and risk averse individuals
  • Efforts to increase health insurance ownership
    • Awareness program
    • Programs to increase individual income level
  • Using prediction model to predict health insurance potential buyers
limitations
Limitations
  • Cross-sectional data
    • Out-of-pocket cost
    • Number of in-patient/out-patient visits
  • Potential duplicate HI ownership
thank you
Thank you!
  • Main references
  • Propper, C. (1989). An Econometric Analysis of the Demand for Private Health Insurance in England and Wales. Applied Economics, 21(6), 777-792.
  • Manning, W. G., Newhouse, J. P., Duan, N., Keeler, E. B., & Leibowitz, A. (1987). Health Insurance and the Demand for Medical Care: Evidence from a Randomized Experiment. The American Economic Review, 77(3), 251-277.
  • Liu, T. C., & Chen, C. S. (2002). An Analysis of Private Health Insurance Purchasing Decisions with National Health Insurance in Taiwan. Social Science and Medicine, 55, 755-774.
  • Correspondence:

Arpah Abu-Bakar

Banking and Risk Management Department

College of Business, Universiti Utara Malaysia

arpah@uum.edu.my / arpahabubakar@gmail.com