Impact of private health insurance on a public healthcare system: the case of cesarean deliveries.

Summary According to the health economics literature, medical practices respond to the source of hospital payments and the rules that govern them. Here, we study the impact of supplementary private health insurance within the DRG-based financing of French hospitals. We use differences between the public and private hospital sectors in managers’ and doctors’incentives (in terms of potential additional payments) and examine their effect on the practice of cesarean deliveries. We mobilize exhaustive delivery data from a French district over a 7-year period (2008-2014) and consider factors that are known to influence obstetric practices. Our empirical results show that, although private hospitals are financed by a single public payer, like those in the public sector, they perform significantly more cesarean deliveries than public hospitals. This result is partially explained by additional payments covered by private health insurance and charged by private but not public hospitals.