Health Insurance Figure 3.7: Have VSS Inpatient and Outpatient Costs Risen Faster Than Those in the Health System as a Whole? 40%
1,000 900
35%
700 25%
600
20%
500 400
15%
300
(marginal) cost per case
increase in cost 2004–2005
800 30%
10% 200 5%
100
0%
0 hospitals in general
VSS
hospitals in general
inpatient care 2004
VSS
outpatient care 2005
% increase
Source: Authors’ calculations from VSS data and MOH hospital inventory. Marginal costs estimated using cost function proposed by Granneman et al., with same coefficients assumed for 2004 and 2005, but hospital-specific fixed effects allowed.
inpatient care is concerned (figure 3.8). Among the population as a whole, inpatient admissions increased on average by 5 percent per year between 2003 and 2006, while among VSS enrollees they increased by 11 percent per year. In contrast, VSS enrollees have recorded a smaller rate of growth of outpatient visits—8 percent compared to 19 percent.
Adverse Selection and Factors Affecting Coverage For inpatient care, then, VSS has experienced growth rates of admissions and costs that exceed those among the population at large. For outpatient care, the utilization rate has grown more slowly among
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