Basic versus supplementary health insurance: Access to care and the role of cost effectiveness

Impact of supplementary private health insurance on hospitalization and physical examination in China

Private health insurance (PHI) is considered an important supplement to the basic social health insurance schemes in the Chinese healthcare system. However, whether the strategy of engaging PHI as supplementary coverage is effective cannot be determined without knowing the impact of supplementary PHI on healthcare access and utilization, the evidence on which is currently absent in China. Therefore, we aimed to investigate the effects of supplementary PHI on hospitalization and physical examination to provide such evidence in the Chinese setting. We conducted a cross-sectional analysis using data from the 2015 wave of China Health and Retirement Longitudinal Study (CHARLS). Using probit models and bivariate probit models with instrumental variables (IVs), we evaluated the effects of supplementary PHI on the utilization of hospitalization and physical examination. Our analyses provided evidence that supplementary PHI increased the probability of physical examination but decreased that of hospitalization. Our findings suggest that supplementary PHI in China may effectively promote the use of high-value preventive care, thereby reducing subsequent utilization of expensive medical services. The present study provided preliminary evidence that the China healthcare system can benefit from engaging PHI as supplements to SHI.

Incentivizing efficient utilization without reducing access: The case against cost-sharing in insurance

Cost-sharing is regarded as an important tool to reduce moral hazard in health insurance. Contrary to standard prediction, however, such requirements are found to decrease utilization both of efficient and of inefficient care. I employ a simple model that incorporates two possible explanations-consumer mistakes and limited access-to assess the welfare implications of different insurance designs. I find cost-sharing never to be an optimal solution as it produces two novel inefficiencies by limiting access. An alternative design, relying on bonuses, has no such side effects and achieves the same incentivization. I show how the optimal design can be deduced empirically and discuss possible impediments to its implementation.

Association Between Supplemental Private Health Insurance and Burden of Out-of-Pocket Healthcare Expenditure in China: A Novel Approach to Estimate Two-Part Model with Random Effects Using Panel Data

Introduction

Private health insurance (PHI) is an important supplement to the basic health insurance schemes in the Chinese healthcare system. However, there is an absence of evidence on whether the strategy of engaging PHI to reduce burden is effective in China. As such, we aimed to investigate the association between supplemental PHI and the out-of-pocket (OOP) burden of household healthcare expenditure in China.

Methods

We conducted a panel data analysis using data from three waves of China Health and Retirement Longitudinal Study (CHARLS). Specifically, a two-part model (TPM) with a first-stage probit and second-stage generalized linear model (GLM) framework was used to analyze the data. To account for individual-level random effects in both stages and their correlation in the TPM analysis, we proposed a generalized structural equation modeling (GSEM) approach to implement the estimation. The proposed approach allowed us to simultaneously analyze the association of PHI with the probability of having any healthcare and the OOP burden conditional on having any healthcare expenditure.

Results

Using the GSEM estimates, we found that supplemental PHI was significantly associated with a higher probability (4.29 percentage points) of having any OOP healthcare expenditure but a lower OOP burden conditional on having any expenditure (−2.37 percentage points). Overall, supplemental PHI was insignificantly associated with a lower OOP burden (−1.05 percentage points).

Discussion

Our findings suggested that supplemental PHI in China may be able to effectively improve access to healthcare while keeping the OOP healthcare expenditure burden flat. Also, GSEM is a feasible method to estimate random-effect TPMs.

Risk selection into supplemental private health insurance in China

BACKGROUND

Information on risk selection is important for the regulation and development of supplemental private health insurance (PHI). The research on risk selection into supplemental PHI has been documented in several developed countries where the regulation of the PHI markets was relatively mature. However, evidence on this important aspect of the supplemental PHI market in China is still absent in the literature. The private insurers in China were not prohibited from discrimination against pre-existing conditions and did not guarantee ongoing enrolment. Therefore, the direction and degree of risk selection could not be inferred using the evidence from the other countries. To provide evidence on risk selection into supplemental PHI in China, we conducted a cross-sectional analysis using data from the 2015 wave of China Health and Retirement Longitudinal Study (CHARLS).

RESULTS

Using probit models, we found that individuals having better self-reported general health were more likely to enrol in PHI in China, suggesting advantageous selection. This result was confirmed by an alternative analysis using an instrumental variable. We also adjusted the realized occurrence of hospitalization by excluding potential moral hazard effect and showed that the adjusted hospitalization risk was negatively associated with PHI enrolment, which also indicated advantageous selection.

CONCLUSIONS

The findings suggested potential over-insurance of healthier individuals or under-insurance of less healthy individuals. The regulation of the PHI market in China should aim to address the inefficiency. The current study could also contribute to the information base for policymakers in countries where the PHI markets similarly lack strong regulation.

Economic Evaluation of the 2016 Chinese Guideline and Alternative Risk Thresholds of Initiating Statin Therapy for the Management of Atherosclerotic Cardiovascular Disease

OBJECTIVE

The 2016 Chinese guidelines for the management of dyslipidemia recommended mixed rules that centered around a 10% 10-year risk threshold to initiate statins for the primary prevention of atherosclerotic cardiovascular disease (ASCVD). The present study aimed to evaluate the cost-effectiveness of the guideline statin-initiation strategy and alternative strategies.

METHODS

A decision analytic model using discrete event simulation with event probabilities based on a validated ASCVD risk prediction tool for Chinese was constructed. Risk factor inputs were from the dataset of a nationally representative survey of middle-aged and elderly Chinese. Data of statin treatment effectiveness were from a published meta-analysis. Other key input data were identified from the literature or relevant databases. The strategies we evaluated were the guideline strategy, a 15% 10-year risk threshold strategy and a 20% 10-year risk threshold strategy. After excluding any extended dominance strategies, the incremental costs per quality-adjusted life year (QALY) gained of each strategy was calculated.

RESULTS

The 20% 10-year risk threshold strategy was an extended dominance option. The incremental costs per QALY gained from the 15% 10-year risk threshold strategy compared with no treatment and the guideline strategy compared with the 15% 10-year risk threshold strategy were CN¥69,309 and CN¥154,944, respectively. The results were robust in most sensitivity analyses.

CONCLUSIONS

The guideline strategy and the 15% 10-year risk threshold strategy are optimal when using the three times and the two times the gross domestic product per capita willingness-to-pay standards, respectively.