Abstract
BackgroundRepresenting a major threat to both equity and efficiency of health systems, the corrupt practice of informal payments is widely found in developing and transition countries. As informal payments are more likely to occur in health systems characterized by a high out-of-pocket payment rate, it is argued that formalized prepaid health insurance programs may help to curb such practice.MethodsUsing panel data from the China Health and Retirement Longitudinal Survey, this study examined the association between changes in health insurance coverage on patient’s behavior proxied with informal payments.ResultsThe statistical results reveal that health insurance status in fact increases the probability of patients making informal payments to physicians. However, this association varies among population groups and insurance programs, particularly between social health insurance and private health insurance status.ConclusionsIn a health system characterized by unequal allocation of medical resources, the dual pursuit of cost saving and quality of care may drive patients to make informal payments for personal gains. This study argues that health policy interventions aimed at curbing informal payments must be based on a thorough understanding of their complex socioeconomic causes and attack the perverse incentives in a coherent and bona fide manner.
Highlights
Representing a major threat to both equity and efficiency of health systems, the corrupt practice of informal payments is widely found in developing and transition countries
Because informal payments are more likely to occur in health system characterized by a high out-ofpocket payment rate, it is argued that formalized financing and payment mechanisms, such as prepaid health insurance programs, may help curb or eliminate private payments [10, 12, 13]
social health insurance (SHI) and Private Health Insurance (PHI) covered 82.7 and 2.4% of the respondents in the sample, respectively, and 92.5% of the inpatient stays occurred in public hospitals
Summary
Representing a major threat to both equity and efficiency of health systems, the corrupt practice of informal payments is widely found in developing and transition countries. As informal payments are more likely to occur in health systems characterized by a high out-of-pocket payment rate, it is argued that formalized prepaid health insurance programs may help to curb such practice. Informal payments from patients to physicians are prevalent in the health systems of developing and transition countries. Because informal payments are more likely to occur in health system characterized by a high out-ofpocket payment rate, it is argued that formalized financing and payment mechanisms, such as prepaid health insurance programs, may help curb or eliminate private payments [10, 12, 13]. The empirical evidence received far, suggests that the increase of insurance coverage and the arrangement of coinsurance have had a limited effect in containing informal payments [5, 14, 15]
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