Studies from Iran University of Medical Sciences Have Provided New Data on Health Insurance (Asymmetric Information in Iranian’s Health Insurance…

Studies from Iran University of Medical Sciences Have Provided New Data on Health Insurance (Asymmetric Information in Iranian's Health Insurance Market: Testing of Adverse Selection and Moral Hazard)

By a News Reporter-Staff News Editor at Managed Care Weekly Digest -- Investigators publish new report on Health Insurance. According to news reporting out of Tehran, Iran, by NewsRx editors, research stated, "Asymmetric information is one of the most important issues in insurance market which occurred due to inherent characteristics of one of the agents involved in insurance contracts; hence its management requires designing appropriate policies. This phenomenon can lead to the failure of insurance market via its two consequences, namely, adverse selection and moral hazard."

Our news journalists obtained a quote from the research from the Iran University of Medical Sciences, "This study was aimed to evaluate the status of asymmetric information in Iran's health insurance market with respect to the demand for outpatient services. This research is a cross sectional study conducted on households living in Iran. The data of the research was extracted from the information on household's budget survey collected by the Statistical Center of Iran in 2012. In this study, the Generalized Method of Moment model was used and the status of adverse selection and moral hazard was evaluated through calculating the latent health status of individuals in each insurance category. To analyze the data, Excel, Eviews and stata11 software were used. The estimation of parameters of the utility function of the demand for outpatient services (visit, medicine, and Para-clinical services) showed that households were more risk averse in the use of outpatient care than other goods and services. After estimating the health status of households based on their health insurance categories, the results showed that rural-insured people had the best health status and people with supplementary insurance had the worst health status. In addition, the comparison of the conditional distribution of latent health status approved the phenomenon of adverse selection in all insurance groups, with the exception of rural insurance. Moreover, calculation of the elasticity of medical expenses to reimbursement rate confirmed the existence of moral hazard phenomenon. Due to the existence of the phenomena of adverse selection and moral hazard in most of health insurances categories, policymakers need to adjust contracts so that to reduce these phenomena."

According to the news editors, the research concluded: "Given the importance of financing, the presence of such problems can lead to less coverage of health insurance provided by insurers, loss of contracts with health care institutions and service providers, and lower quality of health services."

For more information on this research see: Asymmetric Information in Iranian's Health Insurance Market: Testing of Adverse Selection and Moral Hazard. Global Journal of Health Science, 2015;7(6):146-55 (see also Health Insurance).

Our news journalists report that additional information may be obtained by contacting F. Lotfi, Dept. of Health Economics, School of Health Management and Information Sciences, Iran University of Medical Sciences, Tehran, Iran. Additional authors for this research include H. Abolghasem Gorji, G. Mahdavi and M. Hadian.

Keywords for this news article include: Iran, Asia, Tehran, Health Insurance.

Our reports deliver fact-based news of research and discoveries from around the world. Copyright 2016, NewsRx LLC