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Despite current emphasis on health insurance expansions in developing countries, inefficient consumer incentives for over-use of medical care are an important counterbalancing concern. However, three factors that are more acute in poor countries (credit constraints, principal-agent problems, and positive externalities) result in substantial under-use and misuse as well. This paper studies Colombia's Régimen Subsidiado, the first major developing country effort to expand insurance in a way that purposefully addresses these inefficiencies. Using a regression discontinuity design, we find that Colombia's insurance program has provided risk protection while substantially increasing the use of traditionally under-utilized preventive services (with measurable health gains) through high-powered supply-side incentives.
Authors
Research Fellow University College London
Marcos is a Research Fellow at IFS, an Affiliate at the Rural Education Action Program and a Professor of Economics at the University College London.
Grant Miller
Diana Pinto
Report details
- Publisher
- IFS
Suggested citation
G, Miller and D, Pinto and M, Vera-Hernandez. (2010). High-powered incentives in developing country health insurance: evidence from Colombia's 'Regimen Subsidiado'. London: IFS. Available at: https://ifs.org.uk/publications/high-powered-incentives-developing-country-health-insurance-evidence-colombias-regimen (accessed: 20 May 2024).
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