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Prof.dr Tammo H.A. Bijmolt Do Political or Economic Factors Drive Healthcare Financing Privatisations? Empirical Evidence from OECD.

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Presentation on theme: "Prof.dr Tammo H.A. Bijmolt Do Political or Economic Factors Drive Healthcare Financing Privatisations? Empirical Evidence from OECD."— Presentation transcript:

1 Prof.dr Tammo H.A. Bijmolt Do Political or Economic Factors Drive Healthcare Financing Privatisations? Empirical Evidence from OECD R Rasmus Wiese

2 Contribution 1)A novel methodology to detect healthcare privatisations 2)Empirical test of political economy theories and conventional wisdom. Main results: - Economic crisis trigger healthcare financing privatisations - Political factors do not 2

3 Background ›Why/When do countries (not) undertake economic reform? - Sovereign debt crisis imply a lack of reform - Public healthcare expenditure 8% of GDP - Profit and healthcare! 3

4 Motivation ›Lack of studies testing conventional wisdom and theory - Economic crisis, ideology, war of attrition, elections (Drazen & Easterly 2001; Hibbs 1977; Alesina & Drazen 1991) ›Poor measurement of privatisations and reform (Megginson & Netter 2001) ›No quantitative studies of healthcare financing privatisations? 4

5 Do Political or Economic Factors Drive Healthcare Financing Privatisations? Presentation plan: 1)Detecting privatisations 2)Which factors triggered these privatisations? 3)Conclusion 5

6 Detecting privatisations ›General definitions of economic reform and privatisation - Should have a significant economic impact and be a result of planned policy - A shift in ownership (e.g. Saltman 2003) ›Problems: - Policy input or economic outcome data? (Rodrik 1996; Campos & Horváth 2012) - Not necessarily any shift in ownership ›Specific definition of a healthcare financing privatisation: A statistically significant policy induced shift from public to private funding of healthcare 6

7 Detecting privatisations. 2 parts: 1)Detect statistically significant shifts in which “pockets” incur the costs to healthcare. Private vs. public. 2)Validate these shifts using de jure evidence Case study: Healthcare financing privatisations in Austria Part 1: Data and statistical filter ›Data: Public and Private funds incurred to healthcare (OECD) ›Healthcare financing source: 7

8 Healthcare financing source: Austria (Bai & Perron 1998, 2003) privatisation 8

9 In Austria the filter detects: Privatisation in 1968 Privatisation in 1988 Part 2: Validate the detected significant shifts Civil Servants’ Health and Work Accident Insurance Act of 1967 Employment and Social Security Tribunal Act of 1987 Healthcare systems in transition, country reports (WHO) 9

10 Findings in a panel of 23 OECD countries Findings: 33 privatisations detected by the filter 21 can be validated as the result of planned policy Evidence of ‘rigid institutions’ (Acemoglu et al. 2006) Evidence of ‘stroke-of-the-pen’ policies ›Privatisations in 14 out of 23 OECD countries ( ) 10

11 Which factors triggered these privatisations? ›Panel of 23 OECD countries (unbalanced ) ›Dependent variable privatisation - Privatisation y it =1, no privatisations y it =0 ›Binary outcome random effects logit model 11

12 Variables of interest ›Political factors - Ideology (Potrafke 2009) - War of attrition (Political fractionalisation, World Bank DPI) - Elections (executive and legislative, World Bank DPI) ›Economic Crisis - Job crisis (unemployment rate, mean + st.d., OECD) - Debt crisis (interest rate on gov. debt, mean + st.d., OECD) - Recession (year with negative growth, OECD) 12

13 Control variables ›Economic factors: Demographics, technological change, inflation (Oxley & MacFarlan 1994, OECD) - percentage of population over 65 - potential years of life lost - inflation rate ›Duration dependence (Beck et al. 1998) - probability of a reform is affected by earlier reforms 13

14 Main empirical results 14

15 Conclusion ›The filter picks-up privatisations - maybe too strict ›Economic crisis trigger privatisations robustly 1) Perception of the need for significant reform (Drazen 2000) 2) Uncertainty of reform outcome (Fernadez & Rodrik 1991) 3) … ›Other political factors do not impact healthcare financing privatisations: Ideology? - Other measures of ideology 15

16 The end Thank you for your attention 16


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