Publication:
Can Insurance Increase Financial Risk? The Curious Case of Health Insurance in China

Simple item page
dc.contributor.authorWagstaff, Adam
dc.contributor.authorLindelow, Magnus
dc.date.accessioned2012-06-20T14:23:18Z
dc.date.available2012-06-20T14:23:18Z
dc.date.issued2005-10
dc.description.abstractThe most basic argument for insurance is that it reduces financial risk. But since insurance opens up new opportunities for consuming expensive high-technology care which permits health improvements that are valued by the insured, and because in many settings the provider is able and has an incentive to exploit the informational advantage he has over the patient, it is not immediately obvious that insurance will in practice reduce financial risk. The authors analyze the effect of insurance on the probability of an individual incurring "high" annual health expenses using data from three household surveys-one a cross-section survey, the other two panel surveys. All come from China, a country where providers have until recently largely been paid fee-for-service (often according to a schedule that encourages the overprovision of high-technology care and the underprovision of basic care) and who are only lightly regulated. The authors define annual spending as "high" if it exceeds 5 percent of average income in the sample and as "catastrophic" if it exceeds 10 percent of the household's own per capita income. The estimates of the effect of insurance on financial risk allow for the possible endogeneity of health insurance in the panel datasets by allowing for a time-invariant fixed effect capturing unobserved risk that may be correlated with insurance status, and in the cross-section dataset by using instrumental variables, where availability of and eligibility for health insurance are used as instruments. The results suggest that during the 1990s China's government and labor insurance schemes increased financial risk associated with household health care spending, but that the rural cooperative medical scheme significantly reduced financial risk in some areas but increased it in others (though not significantly). From the results, it appears that China's new health insurance schemes (private schemes, including coverage of schoolchildren) have also increased the risk of high levels of out-of-pocket spending on health. Where the authors find evidence of health insurance increasing the risk of "high" out-of-pocket expenses, the marginal effect is of the order of 15-20 percent; in the case of "catastrophic" expenses, it is even larger.en
dc.identifierhttp://documents.worldbank.org/curated/en/2005/10/6323665/can-insurance-increase-financial-risk-curious-case-health-insurance-china
dc.identifier.doi10.1596/1813-9450-3741
dc.identifier.urihttps://hdl.handle.net/10986/8506
dc.languageEnglish
dc.publisherWorld Bank, Washington, DC
dc.relation.ispartofseriesPolicy Research Working Paper; No. 3741
dc.rightsCC BY 3.0 IGO
dc.rights.holderWorld Bank
dc.rights.urihttp://creativecommons.org/licenses/by/3.0/igo/
dc.subjectAGED
dc.subjectAGRICULTURAL WORKERS
dc.subjectAPPLICATIONS
dc.subjectCATASTROPHIC EXPENDITURES
dc.subjectCATASTROPHIC HEALTH EXPENDITURE
dc.subjectCHOICE OF PROVIDER
dc.subjectCHRONIC ILLNESS
dc.subjectDIAGNOSIS
dc.subjectDRUGS
dc.subjectECONOMICS OF HEALTH
dc.subjectECONOMICS OF HEALTH CARE
dc.subjectEMPLOYMENT STATUS
dc.subjectEXPENDITURES
dc.subjectEXPOSURE
dc.subjectFAMILIES
dc.subjectFEE-FOR-SERVICE
dc.subjectFINANCIAL PROTECTION
dc.subjectFINANCIAL RESOURCES
dc.subjectFINANCIAL RISK
dc.subjectGOVERNMENT INSURANCE
dc.subjectHEALTH CARE
dc.subjectHEALTH CARE REFORM
dc.subjectHEALTH CARE SPENDING
dc.subjectHEALTH FINANCING
dc.subjectHEALTH INDICATORS
dc.subjectHEALTH INSURANCE
dc.subjectHEALTH INSURANCE COVERAGE
dc.subjectHEALTH INSURANCE SCHEME
dc.subjectHEALTH INSURANCE SCHEMES
dc.subjectHEALTH INSURERS
dc.subjectHEALTH POLICY
dc.subjectHEALTH SERVICES
dc.subjectHEALTH SPENDING
dc.subjectHEALTH STATUS
dc.subjectHOUSEHOLD CONSUMPTION
dc.subjectHOUSEHOLD INCOME
dc.subjectHOUSEHOLD INCOME ON HEALTH
dc.subjectHOUSEHOLD SURVEY
dc.subjectHOUSEHOLD SURVEYS
dc.subjectIMMUNIZATION
dc.subjectINCOME DISTRIBUTION
dc.subjectINSURANCE
dc.subjectLIVING STANDARDS
dc.subjectMEDICAL BILLS
dc.subjectMEDICAL CARE
dc.subjectMEDICAL EXPENSES
dc.subjectMEDICAL INSURANCE
dc.subjectMEDICAL SAVINGS ACCOUNTS
dc.subjectMEDICAL TECHNOLOGY
dc.subjectMEDICINES
dc.subjectMORAL HAZARD
dc.subjectMORTALITY
dc.subjectNATIONAL HEALTH
dc.subjectNUTRITION
dc.subjectPATIENT
dc.subjectPATIENTS
dc.subjectPHYSICIANS
dc.subjectPOCKET PAYMENT
dc.subjectPOCKET PAYMENTS
dc.subjectPOLICY RESEARCH
dc.subjectPOOR
dc.subjectPOOR HEALTH
dc.subjectPOOR PEOPLE
dc.subjectPOVERTY IMPACT
dc.subjectPRIVATE INSURANCE
dc.subjectPRIVATE SCHEMES
dc.subjectPROGRAMS
dc.subjectPUBLIC INSURANCE
dc.subjectRATES
dc.subjectRISK SHARING
dc.subjectRURAL
dc.subjectRURAL AREAS
dc.subjectRURAL HOUSEHOLD
dc.subjectRURAL POPULATION
dc.subjectRURAL RESIDENTS
dc.subjectRURAL VILLAGES
dc.subjectSAVINGS
dc.subjectVISITS
dc.subjectWORKERS
dc.titleCan Insurance Increase Financial Risk? The Curious Case of Health Insurance in Chinaen
dspace.entity.typePublication
okr.crossref.titleCan Insurance Increase Financial Risk ? The Curious Case Of Health Insurance In China
okr.date.doiregistration2025-04-10T10:34:16.709152Z
okr.doctypePublications & Research::Policy Research Working Paper
okr.doctypePublications & Research
okr.docurlhttp://documents.worldbank.org/curated/en/2005/10/6323665/can-insurance-increase-financial-risk-curious-case-health-insurance-china
okr.globalpracticeSocial, Urban, Rural and Resilience
okr.globalpracticeHealth, Nutrition, and Population
okr.globalpracticePoverty
okr.globalpracticeFinance and Markets
okr.globalpracticeGovernance
okr.globalpracticeHealth, Nutrition, and Population
okr.guid366771468024655560
okr.identifier.doi10.1596/1813-9450-3741
okr.identifier.externaldocumentum000016406_20051004135101
okr.identifier.internaldocumentum6323665
okr.identifier.reportWPS3741
okr.language.supporteden
okr.pdfurlhttp://www-wds.worldbank.org/external/default/WDSContentServer/WDSP/IB/2005/10/04/000016406_20051004135101/Rendered/PDF/wps3741.pdfen
okr.region.administrativeEast Asia and Pacific
okr.region.countryChina
okr.topicLaw and Development::Health Law
okr.topicInsurance and Risk Mitigation
okr.topicHealth Economics and Finance
okr.topicHealth Monitoring and Evaluation
okr.topicPoverty Reduction::Rural Poverty Reduction
okr.topicRural Development
okr.topicFinance and Financial Sector Development
okr.topicHealth, Nutrition and Population
okr.unitDevelopment Research Group (DECRG)
okr.volume1 of 1
relation.isAuthorOfPublication5d38fde2-5803-56c6-b733-3866ea5be265
relation.isAuthorOfPublicationd6df2a53-bb3c-5376-8494-5d7b3af636f6
relation.isAuthorOfPublication.latestForDiscoveryd6df2a53-bb3c-5376-8494-5d7b3af636f6
relation.isSeriesOfPublication26e071dc-b0bf-409c-b982-df2970295c87
relation.isSeriesOfPublication.latestForDiscovery26e071dc-b0bf-409c-b982-df2970295c87
Files
Original bundle
Now showing 1 - 2 of 2
Thumbnail Image
Name:
wps3741.pdf
Size:
248.44 KB
Format:
Adobe Portable Document Format
Download
No Thumbnail Available
Name:
wps3741.txt
Size:
64.02 KB
Format:
Plain Text
Download
License bundle
Now showing 1 - 1 of 1
No Thumbnail Available
Name:
license.txt
Size:
1.71 KB
Format:
Plain Text
Description:
Download
Collections
Policy Research Working Papers