PRIVATE HEALTH-INSURANCE AND PUBLIC-EXPENDITURES IN JAMAICA

Many governments who have large public health care systems are looking for means to reduce the public's financial burden. One approach is to increase reliance on private health care delivery through expanded pr ivate insurance coverage. Using data from Jamaica, we estimate models of the demand for medical care. We find that insurance does induce ind ividuals to opt out of the public sector in favor of the higher-qualit y private sector, thereby reducing total public expenditures on health care. Moreover, since insurance is concentrated among the upper incom e groups, expanded insurance coverage better targets public expenditur es to the poor.