AbstractImpact of health insurance on health care utilization in VietnamIntroduction/importance, goalEconomic and social reforms in Vietnam had huge impact on its previously completely subsidized health care system by introducing user fees, privatizing medical practices and liberalizing pharmaceutical policies. The most significant result were higher health expenditure paid out-of-pocket by users and lower consumption of essential services among high need groups.To deal with these problems, the government introduced a health insurance system in 1992, consisting of mandatory and voluntary schemes for different target population. By mid 2002, the system has enrolled a total of 12.6 million individuals, roughly 16% of the total population. It was expected that the system would lower private health expenditure and thus improve equity and social welfare. If this was indeed the case, insurance coverage that resulted in a reduction in health care expenditure should have also resulted in a proportionally larger increase in utilization among the lower-income individuals. The current research project is set to test suchexpectations by answering the following three questions about health insurance affiliation and health care utilization: 1) Were insured patients more likely to seek medical care vs. self-treatment than the uninsured when fell ill? 2) Among individuals that experienced illness and used medical services, were insured patients more likely to use services from public providers vs.private providers than uninsured patients? 3) Were insured individuals more likely to use preventive service than the uninsured?MethodsThe proposed project will use data from the Vietnam National Health Survey (VNHS, 2001 ~ 2002), which included 36,000 households (158019 individuals) with household information as well as individual health status, health insurance affiliation and health utilization information.Health care utilization will be set as a binary depend variable for each research question with health insurance affiliation set as a primary independent variable, adjusting for other individual, household and community variables such as age, gender, household wealth quintile and rural/urban status. Interaction between health insurance affiliation and household wealth quintile will be investigated as it pertains to the research aims.Two special methodological issues arise when modeling the outcome of health care utilization against health insurance affiliation. The first and most important one is selection bias. There could have been immeasurable factors affecting both individual’s self-selection of health insurance affiliation and his/her choice of health care utilization when ill. Such bias is also known as “endogeneity” in econometrics terms. To correct for the selection bias issue, instrumental variables will be identified and used in the modeling process. For each research question, a bivariate probit estimation will be fitted simultaneously on a primary equation using utilization as an outcome and a secondary equation using health insurance affiliation as an outcome, incorporating some instrumental variables in the secondary equation. If the bivariate probit regression does identify correlation between the error terms of the primary and secondary equations, selection bias is then confirmed and, by virtue of the bivariate probit process, corrected at the same time. The second issue is the clustering of observations. Individuals within 1the same household were clustered and correlated in some way, instead of independent, as assumed by ordinary regression methods. The same is true for households within the same community. This gives rise to correlation among the error terms of the regression equations, which will result in incorrect estimation of the variances of regression coefficients. To correct forsuch correlation, the Huber-White “sandwich” variance estimator will be used. The estimator estimates coefficient variances by maximum likelihood and allows for unspecified correlation structure within clusters and sub-clusters and therefore works in the settings of the current study. All statistical procedures will be carried out using STATA 8.0 package.SignificanceThe proposed research project should be able to confirm (or disprove) the expected effects of health insurance programs, especially in the perspective of social welfare and equity. Lower-income individuals often had larger unmet needs for health care services, therefore a larger positive impact from enrolling into a health insurance program on this group would improve social welfare and equity in health care services and resource allocation. The study would also generate policy implications such as indications for insurance program modification in terms of public/private provider access and preventive care incentives.Moreover, there is very limited information on the impact of public health insurance programs on health care utilization in Vietnam and other developing countries in south-east Asia.This study develops and uses methodologies for evaluating program effectiveness using household survey data and therefore serves as a basis for future researches in the field.Allocation of expenses by categoryCategory Item AmountData collection Purchase of raw data $100Equipment and environment STATA 8.0 package upgrade $100Computer hardware upgrade $550Additional fundingThere is no additional funding for this