Does the reason for buying health insurance influence behaviour? CHERE Working Paper 2006/1

The inter-relationship between private health insurance cover and hospital utilisation is complex. The current policy approach in Australia appears to rely on relatively simple models of the relationships between health insurance coverage, and public and private hospital use. There is considerable evidence of unexplained heterogeneity among the privately insured population. Heterogeneity of preferences is likely to be important not just in determining the uptake of private health insurance, but also the impact of changes in private health insurance on the use of private treatment. A number of studies have used attitudinal variables to model heterogeneity of preferences in other contexts. This study uses the 2001 ABS National Health Survey to identify ?types? among the insured population using their stated reasons for purchasing private health insurance. We find that insurance type is significantly associated with hospital utilisation, particularly the probability of being admitted as a public or private patient. We also find that the government?s insurance incentives were more attractive to particular types of the insured population. This has implications for the effectiveness of the insurance incentives and for the design of policies that aim to reduce pressure on the public hospital system.Private health insurance, health policy, Australia

Use of Discrete Choice Experiments in health economics: An update of the literature

The vast majority of stated preference research in health economics has been conducted in the random utility model paradigm using discrete choice experiments (DCEs). Ryan and Gerard (2003) have reviewed the applications of DCEs in the field of health economics. We have updated this initial work to include studies published between 2001 and 2007. Following the methods of Ryan and Gerard, we assess the later body of work, with respect to the key characteristics of DCEs such as selection of attributes and levels, experimental design, preference measurement, estimation procedure and validity. Comparisons between the periods are undertaken in order to identify any emerging trends.discrete choice experiments, health economics

Estimating end-use demand: A Bayesian approach

Eliminating negative end-use or appliance consumption estimates and incorporating direct metering information into the process of generating these estimates; these are two important aspects, of conditional demand analysis (CDA) that will be the focus of this raper. In both cases a Bayesian approach seems a natural way of proceeding. What needs to be investigated is whether it is also a viable and effective approach. In addition, such a framework naturally lends itself to prediction. Our application involves the estimation of electrical appliance consumptions for a sample of Australian households. This application is designed to illustrate the viability of a full Bayesian analysis of the problem

Joiners, leavers, stayers and abstainers: Private health insurance choices in Australia, CHERE Working Paper 2007/8

The percentage of Australians taking up Private Health Insurance (PHI) was in decline following the introduction of Medicare in 1984 (PHIAC). To arrest this decline the Australian Government introduced a suite of policies, between 1997 and 2000, to create incentives for Australians to purchase private health insurance. These policies include an increased Medicare levy for those without PHI on high incomes, introduced in 1997, a 30% rebate for private hospital cover (introduced 1998), and the Lifetime Health Cover (LHC) policy where PHI premiums are set at age of entry, increasing for each year older than 30 years (introduced 2000). In 2004 the longitudinal study on Household Income and Labour Dynamics in Australia (HILDA), included a series of questions on private health insurance and hospital use. We used the HILDA data to investigate the demographic, health and income factors related to the PHI decisions, especially around the introduction of the Lifetime Health Cover policy. Specifically we investigate who was most influenced to purchase PHI (specifically hospital cover) in 2000 as a response to the Lifetime Health Cover policy deadline. Are those who have joined PHI since the introduction of LHC different from those who joined prior to LHC? What are the characteristics of those who have dropped PHI since the introduction of LHC? We model the PHI outcomes allowing for heterogeneity of choice and correlation across alternatives. After controlling for other factors, we find that LHC prompted moderately well-off working age adults (30-49 yrs) to purchase before the 2000 deadline. Young singles or couples with no children, and the overseas born were more likely to purchase since 2000, while the relatively less well-off continue to drop PHI in spite of current policy incentives.private health insurance, Australia

Decisions about Pap tests: What influences women and providers?

Despite the success internationally of cervical screening programs debate continues about optimal program design. This includes increasing participation rates among under-screened women, reducing unnecessary early re-screening, improving accuracy of and confidence in screening tests, and determining the cost-effectiveness of program parameters, such as type of screening test, screening interval and target group. For all these issues, information about consumer and provider preferences and insight into the potential impact of any change to program design on consumer and provider behaviour are essential inputs into evidence-based health policy decision making. This paper reports the results of discrete choice experiments to investigate women?s choices and providers? recommendations in relation to cervical screening in Australia. Separate experiments were conducted with women and general practitioners, with attributes selected to allow for investigation of interaction between women?s and providers? preferences and to determine how women and general practitioners differ in their preferences for common attributes. The results provide insight into the agency relationship in this context. Our results indicate a considerable commonality in preferences but the alignment was not complete. Women put relatively more weight on cost, chance of a false positive and if the recommended screening interval were changed to one year.Cervical Screening; Discrete choice experiments; Agency relationships, Consumer preferences

Joiners and leavers stayers and abstainers: Private health insurance choices in Australia

The percentage of Australians taking up Private Health Insurance (PHI) was in decline following the introduction of Medicare in 1984 (PHIAC). To arrest this decline the Australian Government introduced a suite of policies, between 1997 and 2000, to create incentives for Australians to purchase private health insurance. These policies include an increased Medicare levy for those without PHI on high incomes, introduced in 1997, a 30% rebate for private hospital cover (introduced 1998), and the Lifetime Health Cover (LHC) policy where PHI premiums are set at age of entry, increasing for each year older than 30 years (introduced 2000). In 2004 the longitudinal study on Household Income and Labour Dynamics in Australia (HILDA), included a series of questions on private health insurance and hospital use. We used the HILDA data to investigate the demographic, health and income factors related to the PHI decisions, especially around the introduction of the Lifetime Health Cover policy. Specifically we investigate who was most influenced to purchase PHI (specifically hospital cover) in 2000 as a response to the Lifetime Health Cover policy deadline. Are those who have joined PHI since the introduction of LHC different from those who joined prior to LHC? What are the characteristics of those who have dropped PHI since the introduction of LHC? We model the PHI outcomes allowing for heterogeneity of choice and correlation across alternatives. After controlling for other factors, we find that LHC prompted moderately well-off working age adults (30-49 yrs) to purchase before the 2000 deadline. Young singles or couples with no children, and the overseas born were more likely to purchase since 2000, while the relatively less well-off continue to drop PHI in spite of current policy incentives.private health insurance, incentives, Australia

Advantageous selection in private health insurance: The case of Australia

When consumers have private information about risk of suffering a loss, or equivalently, if insurers are prohibited from using observable information on risk in underwriting, theoretical models of insurance predict adverse selection. Yet the most common finding in empirical studies is that of no positive correlation between risk and insurance coverage. This is found for different types of insurance (e.g. car, health, life) and in different countries (e.g. France, US, UK, Israel) suggesting a fundamental relationship involving private information and consumer preferences. In this paper, we investigate the nature of risk selection in the Australian market for private health insurance in which community rated private health insurance complements a universal public health care system. We use National Health Survey data on hospital utilisation and individual characteristics to construct an empirical analogue for the risk variable in the Rothschild and Stiglitz model. Estimating the relationship between insurance and risk semi-parametrically, we find robust evidence of favourable selection. To explore the extent to which underlying risk preferences rather than risk drives the decision to purchase health insurance, we use Household Expenditure Survey data to model decisions to purchase a range of insurance products (health, life, accident, home, car) and to engage in risky behaviours (smoking and various forms of gambling). Correlations between residuals in the model suggest that advantageous selection is driven by risk aversion, which theoretical models do not typically capture.health insurance, adverse selection, Australia

Evaluating changes in women's attitudes towards cervical screening following a screening promotion campaign and a free vaccination program. CHERE Working Paper 2009/3

This study examines behavioural changes brought about by two interventions introduced to lower the incidence of cervical cancer in Australia. The first intervention is a media campaign promoting regular screening behaviour to women. The second intervention is a vaccination program providing a free HPV vaccine, Gardasil, to young women launched in the same period. The results using data from discrete choice experiments find that in general, given individual characteristics, the interventions have minor impact on how women value screening attributes. The interventions however alter women?s inherent taste for screening. Unexpectedly, willingness to screen is generally lower post-interventions. The reason for this trend appears to be related to HPV events. For instance, the reduction in screening participation is particularly marked among young women who are eligible for the vaccination program. There is also a larger aversion towards testing among women who gained information on HPV facts and HPV-related measures. Thus, in the face of HPV innovations, screening promotions need to account for these factors. A simulation exercise is then performed to assess the plausibility of several strategies to increase the screening rate. The results nominate supply-side policies, in particular those targeted to health providers, as the most effective strategy.cervical screening, HPV Vaccine, preferences, discrete choice experiment, Australia

Estimating end-use demand: A Bayesian approach.

Eliminating negative end-use or appliance consumption estimates and incorporating direct metering information into the process of generating these estimates; these are two important aspects, of conditional demand analysis (CDA) that will be the focus of this raper. In both cases a Bayesian approach seems a natural way of proceeding. What needs to be investigated is whether it is also a viable and effective approach. In addition, such a framework naturally lends itself to prediction. Our application involves the estimation of electrical appliance consumptions for a sample of Australian households. This application is designed to illustrate the viability of a full Bayesian analysis of the problem.End-use demand; Direct metering; Non-negative estimates; Bayesian conditional demand analysis;