Preventive Care, Care for Children and National Health Insurance

The purpose of this paper is to examine issues related to the coverage of preventive care under national health insurance. Four specific kinds of medical care services are included under the rubric of preventive care: prenatal care; pediatric care, dental care, and preventive physicians' services for adults. We consider whether preventive care should be covered under national health insurance, and if so what is the nature of the optimal plan. Our review of the literature on the effects of medical care on health outcomes suggests that prenatal care and dental care are effective, but pediatric care (except for immunizations) and preventive doctor care for adults are not. Moreover, health outcomes in which care is effective correspond to outcomes in which income-differences in health are observed. These empirical results and the theory of health as the source of consumption externalities indicate that the optimal NHI plan should be characterized by benefits that fall as income rises. In addition, the plan should be selective rather than general with respect to the types of services covered.