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Re-insurance in the Swiss health insurance market: Fit, power, and balance.
Journal article

Re-insurance in the Swiss health insurance market: Fit, power, and balance.

  • Schmid CP CSS Institute for Empirical Health Economics, Lucerne, Switzerland. Electronic address: christian.schmid@css-institut.ch.
  • Beck K CSS Institute for Empirical Health Economics, Lucerne, Switzerland; University of Zurich, Switzerland.
  • 2016-05-10
Published in:
  • Health policy (Amsterdam, Netherlands). - 2016
Health insurance
Re-insurance
Risk adjustment
Health Expenditures
Humans
Insurance Carriers
Insurance, Health
Models, Statistical
Risk Adjustment
Switzerland
English 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 performs 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.
Language
  • English
Open access status
closed
Identifiers
Persistent URL
https://folia.unifr.ch/global/documents/147377
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