Principal Investigator:

Dr. Tetsuji Yamada, Department of Economics

This pilot study is partially funded by the Center for Children and Childhood Studies

The increase in uninsured and underinsured households and their children for health care services is an urgent policy issue that needs to be addressed in order to maintain a healthy population in the United States. The number of Americans without insurance is likely to grow from 44 million today to 65 million in 2010. Lack of insurance is not just an economic problem, but a health problem as well. There are four important aspects: access, utilization, outcomes and improvement of health status, namely health stock. The recently rapid trend toward managed care along with public (Medicaid) and private insurance will have a large influence not only on health of children now and in the future, but also on health care expenditure. The high managed care penetration provides less charity care among uninsured households and children. The gap between uninsured and insured persons as it relates to access to health care is increasing. There is little conclusive evidence on the effect of health insurance with uninsured and underinsured children under the current private and public health insurance system on access, utilization, health outcomes and health stock of children.

For the government program, the Balanced Budget Act of 1997 established the State Children’s Health Insurance Program (SCHIP), which makes health insurance available to children under the age of eighteen who are members of low income families that do not qualify for Medicaid. The recent development in the government outreach strategies of the SCHIP program has contributed to reduce the disparity in healthcare service accessibility to children. The variation in coverage of a state’s SCHIP program depends on the particular state’s baseline and criteria. This variation introduces an inequality of health accessibility, which in turn, leads to health inequality in children among and within states. In order for SCHIP programs to reduce the number of children with unmet healthcare needs and improve the health of children, financial and practice-level barriers for healthcare services must be diminished.

This project focuses on investigation of health insurance effects on access to health care, health care utilization, health outcomes and health stock of children. The effect of private and public health insurance has been widely studied in the adult population, but the results may not be applicable to children, who have health care needs and unmet needs with regard to prevention, treatment and illness to avoid long-term health problems. It is also useful to understand clearly how government intervention, as a policy, improves the health status of children. This project will offer some insights into health care access, utilization, health outcomes and health stock of children by private and public health insurance programs.

The approach for health economics to the analytical model is represented two ways: demand function and health production function. One major problem of the demand function is that it reflects a complex combination of the following: care prices (full price, bill price and time cost), quantity of care (number of visits, patient days and cases treated), quality and intensity of care. The health production function describes the relationship between combinations of utilization and the resulting output. This project will use a health production function approach.