Re-Insurance in the Swiss health insurance market: fit, power, and balance

Schmid, Christian Philipp; Beck, Konstantin (2016). Re-Insurance in the Swiss health insurance market: fit, power, and balance. Health Policy, 120(7), pp. 848-855. Elsevier 10.1016/j.healthpol.2016.04.016

Text schmid re-insurance.pdf - Published Version Restricted to registered users only Available under License Publisher holds Copyright. Download (568kB) | Request a copy

Risk equalization mechanisms mitigate insurers’ incentives to practice risk selection. On the other hand, incentives to limit healthcare spending can be distorted by risk equalization, particularly when risk equalization payments depend on realized costs instead of expected costs. In addition, cost-based risk equalization mechanisms may incentivize health insurers to distort the allocation of resources among different services. The incentives to practice risk selection, to limit healthcare spending, and to distort the allocation of resources can be measured by fit, power, and balance, respectively. We apply these three measures to evaluate the risk adjustment mechanism in Switzerland. Our results suggest that it per-forms very well in terms of power but rather poorly in terms of fit. The latter indicates that risk selection might be a severe problem. We show that re-insurance can reduce this problem while power remains on a high level. In addition, we provide evidence that the Swiss risk equalization mechanism does not lead to imbalances across different services.

Interest & Impact

Downloads

2 since deposited on 04 Jul 2017
0 in the past 12 months

Citations

5 Citations in Web of Science ®
6 Citations in Scopus

Search

in Google Scholar™

Services

Actions (login required)

Edit item

Actions (login required)

Edit item