The impact of health insurance on outpatient utilization and expenditure: evidence from one middle-income country using national household survey data

BACKGROUND: Achieving universal health insurance coverage by means of different types of insurance programs may be a pragmatic and feasible approach. However, the fragmentation of the health financing system may imply costs in terms of varying ability of the insurance programs to improve access to and reduce spending on care across different population groups. This study looks at the effect of different types of health insurance programs on the probability of utilizing care, the intensity of utilization, and individual spending on care in Jordan. METHODS: Using national household survey data collected in 2000 with a sub-sample of around 8,300 individuals, the study applies econometric techniques to a set of specified models along the two-part model approach to the demand for health care. By means of particular tests and other procedures, the robustness of the results is controlled. RESULTS: Around 60 percent of the population is covered by some type of insurance. However, the distribution varies across income groups, and importantly, the effect of insurance on the outcome indicators differ substantially across the various programs. Generally, insurance is found to increase the intensity of utilization and reduce out-of-pocket spending, while no general insurance effect on the probability of use is found. More specifically, however, these effects are only found for some programs and not for all. The best performing programs are those to which the somewhat better off groups have access. CONCLUSION: Notwithstanding the empirical nature of the issues, the results point at the need to assess the effect of insurance coverage more profoundly than what is commonly done. Applying rigorous analysis to survey data in other settings will contribute to bringing out better evidence on what types of programs perform most effectively and equitably in different contexts.