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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

Authors Jiang Y, Ni W

Received 13 July 2019

Accepted for publication 21 January 2020

Published 14 April 2020 Volume 2020:13 Pages 323—334


Checked for plagiarism Yes

Review by Single anonymous peer review

Peer reviewer comments 2

Editor who approved publication: Dr Kent Rondeau

Yawen Jiang,1 Weiyi Ni2

1School of Public Health (Shenzhen), Sun Yat-sen University, Guangzhou, Guangdong, People’s Republic of China; 2Department of Pharmaceutical and Health Economics, University of Southern California, Los Angeles, CA 90089-3333, USA

Correspondence: Yawen Jiang
School of Public Health (Shenzhen), Sun Yat-sen University, Room 215, Mingde Garden #6, 132 East Outer Ring Road, Pan-Yu District, Guangzhou, Guangdong, People’s Republic of China
Tel +1 213-320-1361

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.

Keywords: private, health insurance, China, out-of-pocket, burden

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