Post on 01-Apr-2015
Prof.dr Tammo H.A. Bijmoltt.h.a.bijmolt@rug.nl
Do Political or Economic Factors Drive Healthcare Financing Privatisations?
Empirical Evidence from OECD
RRasmus Wiese
r.h.t.wiese@rug.nl
Contribution
1)A novel methodology to detect healthcare privatisations
2)Empirical test of political economy theories and conventional wisdom. Main results:
- Economic crisis trigger healthcare financing privatisations
- Political factors do not
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Background
› Why/When do countries (not) undertake economic reform?
- Sovereign debt crisis imply a lack of reform
- Public healthcare expenditure 8% of GDP
- Profit and healthcare!
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Motivation › Lack of studies testing conventional wisdom and
theory - Economic crisis, ideology, war of attrition, elections (Drazen & Easterly 2001; Hibbs 1977; Alesina & Drazen 1991)
› Poor measurement of privatisations and reform (Megginson & Netter 2001)
› No quantitative studies of healthcare financing privatisations?
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Do Political or Economic Factors Drive Healthcare Financing Privatisations?
Presentation plan:1)Detecting privatisations
2)Which factors triggered these privatisations?
3)Conclusion
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Detecting privatisations› General definitions of economic reform and privatisation
- Should have a significant economic impact and be a result of planned policy
- A shift in ownership (e.g. Saltman 2003)
› Problems: - Policy input or economic outcome data? (Rodrik 1996; Campos & Horváth 2012)
- Not necessarily any shift in ownership
› Specific definition of a healthcare financing privatisation:
A statistically significant policy induced shift from public to private funding of healthcare
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Detecting privatisations. 2 parts:
1)Detect statistically significant shifts in which “pockets” incur the costs to healthcare. Private vs. public.
2)Validate these shifts using de jure evidence
Case study: Healthcare financing privatisations in Austria
Part 1: Data and statistical filter
›Data: Public and Private funds incurred to healthcare (OECD)
›Healthcare financing source:
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Healthcare financing source: Austria
(Bai & Perron 1998, 2003)
privatisation
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In Austria the filter detects:•Privatisation in 1968•Privatisation in 1988
Part 2: Validate the detected significant shifts
•Civil Servants’ Health and Work Accident Insurance Act of 1967
•Employment and Social Security Tribunal Act of 1987
Healthcare systems in transition, country reports (WHO)
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Findings in a panel of 23 OECD countries
Findings:• 33 privatisations detected by the filter• 21 can be validated as the result of planned policy• Evidence of ‘rigid institutions’ (Acemoglu et al. 2006)
• Evidence of ‘stroke-of-the-pen’ policies
›Privatisations in 14 out of 23 OECD countries (1960-2010)
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Which factors triggered these privatisations?
› Panel of 23 OECD countries (unbalanced 1975-2006)
› Dependent variable privatisation
- Privatisation yit=1, no privatisations yit=0
› Binary outcome random effects logit model
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Variables of interest
› Political factors
- Ideology (Potrafke 2009)
- War of attrition (Political fractionalisation, World Bank DPI)
- Elections (executive and legislative, World Bank DPI)
› Economic Crisis- Job crisis (unemployment rate, mean + st.d., OECD)
- Debt crisis (interest rate on gov. debt, mean + st.d., OECD)
- Recession (year with negative growth, OECD)
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Control variables
› Economic factors: Demographics, technological change, inflation (Oxley & MacFarlan 1994, OECD)
- percentage of population over 65
- potential years of life lost
- inflation rate
› Duration dependence (Beck et al. 1998)
- probability of a reform is affected by earlier reforms
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Main empirical results
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Conclusion › The filter picks-up privatisations
- maybe too strict
› Economic crisis trigger privatisations robustly1) Perception of the need for significant reform (Drazen 2000) 2) Uncertainty of reform outcome (Fernadez & Rodrik 1991) 3) …
› Other political factors do not impact healthcare financing privatisations: Ideology?
- Other measures of ideology
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The end
Thank you for your attention
r.h.t.wiese@rug.nl
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