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Jurnal Ekonomi Malaysia

46 (2) 2012 159 – 175

Moral Hazard and the Impact of Private Health Insurance on the Utilisation of Health Care in Malaysia
Bahaya Moral dan Kesan Insurans Kesihatan Swasta ke atas Penggunaan Penjagaan Kesihatan di Malaysia

Faculty of Economics and Muamalat
Universiti Sains Islam Malaysia
Bandar Baru Nilai
71800 Nilai, Negeri Sembilan
MALAYSIA

zurina@usim.edu.my

Centre for Health Economics Research & Evaluation (CHERE)
University of Technology, Sydney
PO Box 123 Broadway NSW 2007
AUSTRALIA

glenn.jones@uts.edu.au

Abstract

In Malaysia, private health insurance coverage is usually limited to inpatient treatment or hospitalisation. With private health insurance, there is a possibility that individuals will use health care services more frequently or spend more on health care (known as moral hazard effects) because they know they are protected. This study estimates the importance of factors affecting the demand for private health insurance and how it affects health care utilisation. This paper also provides an empirical test for the existence of moral hazard effects in health care utilisation. The analysis uses the second and third National Health and Morbidity Surveys (NHMS), which were conducted in 1996 and 2006. The analysis applies a bivariate probit model to estimate the demand for private insurance and its effect on the utilisation of health care. Utilisation of health care is defined as being admitted to either a public or private hospital. The results show that taking up private health insurance is lower among disadvantaged individuals, such as those with lower income, a lower level of education, those living in less developed regions and the unemployed. The findings also show that health conditions have a very strong effect on the hospitalisation decision. Furthermore, the results demonstrate that evidence of moral hazard existed in the 1996 but not in the 2006 data. From the results, policy makers can target an appropriate population for providing health subsidies if the National Health Insurance Scheme is implemented.

Keywords

health care financing; health care utilisation; moral hazard; Private health insurance
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Zulkefli, , & jones, (2012). Moral Hazard and the Impact of Private Health Insurance on the Utilisation of Health Care in Malaysia. Jurnal Ekonomi Malaysia, 46(2), 159–175.

@article{Zulkefli2012moral,
  title={Moral Hazard and the Impact of Private Health Insurance on the Utilisation of Health Care in Malaysia},
  author={Zulkefli, Zurina and jones, Glenn},
  journal={Jurnal Ekonomi Malaysia},
  volume={46},
  number={2},
  pages={159—175},
 

year={2012},
}

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