Health Insurance and Health Care Supply--- An Empirical Study using Taiwan's Dentist Market

One major objective of implementing National Health Insurance (NHI) in Taiwan is to provide equal access to adequate health care for all citizens. NHI is expected to reduce health disparities through universal insurance coverage; however, there may not be a sufficient supply of providers to successfully carry out this endeavor. Achieving this goal is even more unlikely in some rural or remote areas, which were previously unprofitable. Before the adoption of NHI, most of the uninsured resided in small towns or remote areas. The number of physicians in these areas is far below that in urban areas. If implementation of NHI does not induce enough supply response, the policy goal of equal access cannot be achieved. Hence, from the policy perspective, this issue is critical because NHI is expected to solve health care inequalities between urban and rural areas. This paper analyzes the impact of the health insurance expansion on the number of dentists in remote areas. We examine whether dentists enter an area, which was previously unprofitable, after a health insurance expansion. We first take advantage of the feature of exogenous shock when Taiwan implemented two insurance policies, Farmer’s Insurance and National Health Insurance, in 1985 and 1995 respectively. Second, we obtain the number of dentists for each township using the physician registry files obtained from Department of Health. Third, based on the Bureau of Census’s Population Census, we calculate the number of insured for each township. In addition, in order to have a better estimation, we use this population census to correct the inconsistency between the number of registered residence and de facto population. Lastly, we use a Probit model and estimate for a township the probability of being a no-dentist township. With this estimation results, we analyze the impact of a health insurance expansion on the number of dentists in a remote area.

Project ID:PF9402-0011
External Project ID:NSC94-2415-H182-001