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Disability Insurance as Incentive

Women in Taiwan undergo hysterectomies at a much higher rate than those living in the rest of the world. It seems a well-meaning public insurance program may be responsible

Hysterectomy rates in Taiwan are around 25 percent, compared with 10 to 15 percent in many other countries. Ching-To Albert Ma, professor of economics at Boston University, offers one compelling reason why. In research with Elliott Fan (National Taiwan University) and Hsienming Lien (National Chengchi University), Ma showed how a public disability insurance plan introduced some 50 years ago inadvertently offers employed women an incentive to undergo surgical removal of an organ. Ma shared their findings at an event organized by The Monieson Centre for Business Research in Healthcare, and elaborated on the work in this conversation.

Video Highlights

1:22     Ma describes this “uncommon natural experiment.” In the 1960s, Taiwan introduced a disability insurance program that compensated women — up to the age of 45 — who lost the ability to conceive as a result of one of three medical operations: hysterectomy (removal of the uterus); oophorectomy (removal of the ovaries); and radiation therapy. 

3:10     Studying the data on the benefits program and the incidence of the three procedures, Ma and his colleagues found that occurrences of hysterectomies rise dramatically in the year before women turn 45, after which they drop off precipitously. No similar pattern was seen among women in Taiwan who had a hysterectomy but were not eligible for disability payments (mainly unemployed women), nor among women who had an oophorectomy. “People tend to respond to this incentive by undergoing surgical removal of the uterus at a point just before expiration of the benefit.”

4:16     Ma says the disability insurance scheme is a well-intentioned program that reflects Chinese social views on families. In China, children are expected to take care of their parents in old age, Ma says, and that “not having enough children is like a financial loss.” The disability benefit is one way to compensate for this loss.

10:57     Many health economists, commentators, and policy makers believe people do not have the right information to make fully informed medical decisions. Ma disagrees with how the issue is framed. “The issue is whether people are given the right incentive to acquire the information.”