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The Effect of Health Insurance on the Demand for Health Services*

Published online by Cambridge University Press:  07 November 2014

L. Richter
L. Richter*
Affiliation:
Dalhousie University
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Extract

How will the introduction of health insurance influence the demand for health services? In the discussions on the reform of our health services this question has been seldom put and hardly ever answered. Expressly or tacitly the assumption is made that the present demand can be used as a yardstick for measuring future needs under a system which it is thought aims mainly at a more equitable distribution of available services.

The problem is, however, of a more fundamental nature. What health insurance would achieve is to remove the whole field of health care from the automatism of the price system. The fee-for-service system based on the individual's ability to pay for medical care will disappear. A compulsory scheme of prepayments will be introduced which will entitle insured persons to services whenever they need them or whenever they feel that they do. Economic and psychological factors about which very little is known so far will come into play, and are bound to have a profound influence on the demand for health care. Changes may be of a quantitative and of a qualitative nature. Not only may the demand increase but it may also be directed toward other types of health care than in the past.

All these factors have to be considered when the foundations of a national system of health insurance are being laid. They are, of course, decisive for the cost of the scheme and for the supply of health personnel. But the evaluation of the potential demand will also have a bearing on the type of services to be offered, on the form of organization and administration, and above all, on the methods used for making the beneficiaries of the scheme conscious of their responsibilities.

Type
Articles
Information
Canadian Journal of Economics and Political Science/Revue canadienne de economiques et science politique , Volume 10 , Issue 2 , May 1944 , pp. 179 - 205
Copyright
Copyright © Canadian Political Science Association 1944

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Footnotes

*

This study was undertaken by the writer in co-operation with the late Dr. A. L. McLean and Miss Jean Peabody of the Dalhousie Medical School, both of whom have made essential contributions. The writer is further indebted to Dr. Enid Charles, Ottawa, Dr. Selwyn Collins, Washington, Dr. Michael Davis, New York, and Miss Margaret C. Klem, Washington, who read the manuscript and made valuable suggestions for its improvement. Through the courtesy of the Dominion Bureau of Statistics, unpublished Census material was made available for the study.

References

1 The publication of the Committee most often quoted in the present study is Falk, I. S., Klem, Margàret C., and Sinai, Nathan, The Incidence of Illness and the Receipt and Costs of Medical Care among Representative Family Groups (Chicago, 1933).Google Scholar

2 Collis, Edgar L., “The Coal Miner, His Health, Diseases and General Welfare” (Journal of Industrial Hygiene (Harvard), vol. VII (5), 05, 1925).Google Scholar

3 In the same year average wages in the manufacturing industries of Nova Scotia totalled $926 for men and $469 for women ( Canada, Dominion Bureau of Statistics, The Manufacturing Industries of Canada in 1938, Ottawa, 1941, p. 45).Google Scholar

4 In the 1931 Census 2,039 wage-earners were counted in Yarmouth in families with wage-earner heads.

5 Information from the Dominion Bureau of Statistics.

6 This is at any rate the actual practice although there are no written regulations to that effect.

7 Very few morbidity studies have so far been undertaken in Canada. The three most comprehensive are: Jackson, F. E., “Morbidity Survey in the Municipal Doctor Areas of Manitoba” (Canadian Public Health Journal, vol. XXXII (10), 10, 1941)Google Scholar; Sinai, Nathan, Hall, Margaret F., and Holmes, Royden E., Medical Relief Administration: Final Report of the Experience in Essex County, Ontario (1939)Google Scholar; and Statistical Studies of Illness in the Civil Service of Canada, published annually by the Department of Health in Ottawa and edited by Dr. F. S. Burke.

8 Falk, et al., The Incidence of Illness, p. 75.Google Scholar

9 Ibid., p. 70.

10 Ibid., p. 57.

11 Ibid., p. 266, Table b 11.

12 Ibid.

13 In the surveys of the Committee on the Costs of Medical Care and some surveys of the United States Public Health Service, housewives and school children are counted as disabled when confined to bed, hospitalized, or otherwise unable to attend to their work ( Falk, et al., The Incidence of Illness, p. 76 Google Scholar, and Collins, Selwyn D., “Cases and Days of Illness among Males and Females with Special Reference to Confinement in Bed,” Public Health Reports, Reprint no. 2129, 1940).Google Scholar

14 Cf. footnote 7.

15 Annual Report on Incapacitating Illness among Wage-Earners in Scotland for 1937 (Department of Health for Scotland, p. 7).Google Scholar

16 International Labour Office, Statistical Methods for Measuring Occupational Morbidity and Mortality (Geneva, 1930), chap. VII.Google Scholar

17 Ibid., p. 70.

18 Report on Incapacitating Sickness in the Insured Population of Scotland during the Year July I, 1933, to June 30, 1934 (Department of Health for Scotland, p. 49).Google Scholar

19 Collins, Selwyn D., “Frequency and Volume of Doctors' Calls among Males and Females in 9,000 Families Based on Nationwide Periodic Canvasses, 1928-31” (U.S. Public Health Report, Reprint No. 2205, p. 12).Google Scholar

20 The call rates thus correspond more or less to the rates of incidence of illness which were previously found for these age groups.

21 This is in keeping with the findings made in the survey of 9,000 representative families. Collins has stated that of 100 cases of medically-attended illness with prescriptions there were among women 54 prescriptions and among men 52. See Collins, Selwyn D., “The Frequency of Doctors' Prescriptions and of Laboratory and Related Services in the Treatment of Illness” (The Millbank Memorial Fund Quarterly, vol. XXI (4), 10, 1943, p. 10).Google Scholar