Economic Incentives and Health-Seeking Behavior: Case of Shanghai

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Abstract

Objective: This research evaluates the influence of economic incentives on health insurance compensation in shaping residents' health-seeking behaviors, drawing on evidence from Shanghai's 2015 primary care policy reform.

Background: The 2015 reform in Shanghai's health insurance aimed to reduce the burden on tertiary hospitals and promote primary care. While maintaining access to higher-tier hospital services, the reform raises questions about its actual impact on health-seeking behaviors, considering that health, as a unique good, may be valued beyond economic incentives.

Methods: The study will use a two fixed-effects model to analyze behavioral changes in light of the policy reform, using a dataset covering 2013-2017 with over 10 million annual observations from government database. Shanghai city's health services will act as the treatment group, with a comparison group possibly drawn from other metropolitan areas like Guangdong or Beijing.

Theoretical Framework: The Health Belief Model (HBM) suggests health behaviors are a response to personal beliefs about health risks and benefits of actions. This study hypothesizes that primary care engagement is influenced by perceptions of health risks and the effectiveness of care. Additionally, socioeconomic factors from O’Donnell’s review on healthcare utilization are considered critical in healthcare access, potentially indicating a significant role for economic incentives.

Hypotheses:
1. Economic incentives will increase the use of outpatient services.
2. Such incentives will reduce the per visit out-of-pocket costs.

Robustness Test: A synthetic control method will be applied to account for variations in health insurance policies across provinces and to identify a comparable control group.

Conclusion: The study aims to provide empirical insights into the policy's effectiveness and the potential for economic incentives to drive desirable changes in health-seeking behaviors within the context of a major urban health insurance system.

Author

• Di Wu, UC San Diego