Decentralization and the partial health care ‘opting out’

Abstract

When health care is delivered by a mainstream public insurer such as the National Health Service (NHS), uniform health services pose as challenge to satisfy heterogeneous demands for care, and some share of the population chooses to partially ‘opts out’ by using, and supporting, private health care. We investigate the effect of the political decentralization of the NHS, which lead to the reallocation of political health care authority to regions, on both individual preferences for, and satisfaction with, public health care, alongside the actual uptake of private health insurance (PHI). We find robust evidence of shift in perceptions and preferences making more likely that individuals would use public health care and, a consistent reduction in the uptake of PHI for some subsamples, after decentralization. These results are heterogeneous by income and education groups and robust to placebo and other checks.