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¹Department of Health Policy and Administration, Faculty of Public Health, University of Indonesia, Indonesia. b_hidayat@hotmail.com

Cost Effectiveness and Resource Allocation : C/E

|August 7, 2008

Summary

Health insurance significantly increases healthcare demand in Indonesia, with unconditional estimates showing higher impacts than conditional ones. The positive effect is most pronounced among lower-income groups, supporting national health insurance initiatives.

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Area of Science:

Health economics
Healthcare utilization
Econometrics

Background:

Estimating healthcare demand is challenging due to sample selectivity and illness under-reporting.
This study investigates the impact of health insurance on healthcare demand in Indonesia.

Purpose of the Study:

To compare healthcare demand estimates using both unconditional and conditional samples.
To assess the effect of health insurance on healthcare utilization across different provider types and income groups in Indonesia.

Main Methods:

Multinomial logit regression was applied to analyze outpatient care demand.
Data from the Indonesian Family Life Survey (N=16485 unconditional, N=5055 conditional) was used.
The recycling prediction method estimated utilization rates based on insurance and income.

Main Results:

Both unconditional and conditional estimates showed similar covariate directions.
Unconditional estimates indicated higher insurance effects (7.5% public, 20% private providers) than conditional ones.
Health insurance positively impacts healthcare demand, especially for the lowest income group.

Conclusions:

Conditional estimates avoid selection bias but yield smaller insurance demand effects.
Health insurance programs enhance access to healthcare, justifying the development of national health insurance.
The choice between conditional and unconditional estimates depends on study objectives.