Three essays on the effects of health policy on health care financing, demand, and provision

Abstract

This dissertation evaluates the effects of a rural health insurance program in China and tort reforms in the United States. Rural residents’ health status, health-seeking behaviors, financial burden, physicians’ practices, and total hospitalization charges are discussed in the three chapters respectively. The first chapter estimates the 6–12 year effects of the New Cooperative Medical System (NCMS) on reducing the financial burden of rural residents and improving their health status. The NCMS is a national health insurance system for rural residents in China. The primary goals of this program are to alleviate medical impoverishment and improve health. The implementation of the NCMS can be divided into two stages, a pilot stage, and a full implementation stage. The pilot stage ran from 2003 to 2007. The full implementation stage began in 2008. Insurance coverage rates and reimbursement levels of the two stages are substantially different. Although numerous studies reported the effects of the expanded insurance coverage at the pilot stage, we know little about the longer-term effects of the NCMS program. The time span of my research covers both the pilot stage and the full implementation stage. This study utilizes the panel data from the China Health and Nutrition Survey. It is a nationwide longitudinal survey project and mainly focuses on the health and nutritional status of the population. In the survey years, the coverage rate of the program at the individual level reached 93 percent. I apply the individual fixed-effects strategy and the probit model with the Mundlak device estimation. Different from previous studies’ findings that there is no evidence that the scheme has reduced out-of-pocket spending, the result of this research shows that the NCMS has a significant effect on relieving the financial burden, as measured by out-of-pocket spending among patients. This effect could be explained by the fact that the reimbursement levels in the full implementation stage are substantially higher than those in the pilot stage. This effect is heightened among lower-income, younger, better educated, and married patients. However, there is no evidence that the NCMS changes their health-seeking behaviors or improves residents’ health. The goals of the NCMS program are to reduce the burden of medical expenditure and to improve health. These goals are logically related. Health policy assumes that lack of insurance contributes to poor health. Therefore, reducing medical expenditure can lead to increased access to healthcare and consequently to improved health. This research shows that the NCMS reduces the financial burden of individuals in rural areas. However, it does not affect health-seeking behaviors. These results explain the lack of improvement in health outcomes from the NCMS. The second chapter examines malpractice pressure by evaluating the effects of tort reform on physicians’ choice of procedure. While the World Health Organization suggests the ideal rate for cesarean sections (C-section) to be between 10% and 15%, the C-section rate in the United States has been over 30% since 2005. There is no evidence showing the benefits of unnecessary C-sections. However, C-sections are costly in time, medical care resources, and patient comfort. Like any surgery, C-sections do entail short and long term risks which can extend many years beyond the current delivery, affecting the health of the woman, her child, and future pregnancies. One of the reasons that physicians perform unnecessary C-sections is malpractice pressure. Physicians employ precautionary treatments to avoid legal liability. Tort reforms attempt to change physicians’ practices by relieving their liability pressures. The four most common state-level tort reforms are caps on punitive damages, caps on noneconomic damages, reform of the rule of joint and several liabilities, and reforms of the collateral source rule. A substantial number of states have adopted tort reforms by 2010. Numerous studies have examined malpractice pressure by evaluating the effects of tort reform on physicians’ choice of procedure. Yet the heterogeneous effects of tort reforms based on hospitals’ characteristics such as being in urban or rural areas, and ownership type are not clear. We estimate the heterogeneous effects of tort reforms on physicians’ diagnosis, C-section rates, and total hospitalization charges using the National Inpatient Sample and the Database of State Tort Law Reforms from 2001 to 2010. Taking advantage of a large number of observations and detailed information about hospitals and procedures, we apply the difference-in-differences model with time fixed effects, hospital fixed effects, and both mother and hospital control variables. We find strong evidence to support the claim that relief of malpractice pressure induces physicians to perform fewer C-sections. Physicians in rural or public hospitals face more malpractice pressure than those in urban or private hospitals. The third chapter aims to identify factors from a demand-side affecting patients’ cross-regional mobility decisions to provide recommendations to policymakers to encourage patient mobility. The unbalanced distribution of health resources within countries prevents people from having equal access to good health care. Patient mobility constitutes a way of using health care services effectively and efficiently. The data for this study were drawn from the China Health and Retirement Longitudinal Study. We built our sample based on individuals who had hospitalization experiences in the preceding year. Following the six-step purposeful selection method, we developed a multivariate population average logit regression model. The results indicated that being diagnosed with cancer or malignant tumor plays the most important role in influencing patients’ decisions. Concurrently, a high reimbursement rate of health insurance obviously encourages patient mobility. Different from the positive effect of being diagnosed with cancer or malignant tumor, being diagnosed with arthritis and rheumatism hamper patient mobility. Additionally, medical technology progress promotes patient mobility, and older patients are unlikely to travel long distances to seek hospitalizations. This study is the first to examine the determinants of inter jurisdictional patient mobility in China from the demand side. The policy implications of the findings include improving the screening and diagnosis of malignant diseases such as cancer, raising the reimbursement level of health insurance for urban unemployed residents and rural residents, and encouraging the development and popularization of medical technologies.U of I OnlyAuthor requested U of Illinois access only (OA after 2yrs) in Vireo ETD syste