Health-adjusted premium subsidies in The Netherlands: As it implements managed competition, the Dutch government has taken steps to avoid risk selection in its sickness funds (original) (raw)
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Health-Adjusted Premium Subsidies In The Netherlands
Health Affairs, 2004
The Dutch government has decided to proceed with managed competition in health care. In this paper we report on progress made with health-based risk adjustment, a key issue in managed competition. In 2004 both Diagnostic Cost Groups (DCGs) computed from hospital diagnoses only and Pharmacy-based Cost Groups (PCGs) computed from outpatient prescription drugs are used to set the premium subsidies for competing risk-bearing sickness funds. These health-based risk adjusters appear to be effective and complementary. Risk selection is not a major problem in the Netherlands. Despite the progress made, we are still faced with a full research agenda for risk adjustment in the coming years. N e t h e r l a n d s H E A LT H A F F A I R S~Vo l u m e 2 3 , N u m b e r 3 4 5
Evaluating Reforms in the Netherlands' Competitive Health Insurance System
Eurohealth, 2012
Eurohealth is a quarterly publication that provides a forum for researchers, experts and policymakers to express their views on health policy issues and so contribute to a constructive debate in Europe and beyond. The views expressed in Eurohealth are those of the authors alone and not necessarily those of the European Observatory on Health Systems and Policies or any of its partners.
Incomplete risk adjustment and adverse selection in the German public health insurance system
2002
The German statutory health insurance market was exposed to competition in 1996. To avoid adverse selection, a prospective risk compensation scheme was introduced in 1994. Due to their low contribution rates, company-based sickness funds were able to attract a lot of new members. We analyze -using data from the German Socio-Economic Panel -the determinants of these transitions from 1995 to 2000. By estimating a simultaneous two equation system, we find that health status positively, and significantly, affects the probability of changing to a company-based sickness fund, especially after controlling for age. Thus the risk compensation scheme does not fully control for the health status of the changers. Consequently, the comparative advantages of company-based funds will increase over time. This observation provides evidence for the standard Rothschild-Stiglitz separating equilibrium.
Reforming Social Insurance in The Netherlands
2000
This paper discusses recent reforms of social insurance in the Netherlands. It describes how a serious economic crisis in the beginning of the 1980s set the stage for the subsequent reform process. The most fundamental reforms were introduced in the areas of sickness insurance, which was privatized, and disability insurance, which now involves experience rating. After exploring various challenges affecting the future of social protection, the paper discusses various remaining policy options.
Risk structure compensation in Germany's statutory health insurance
The European Journal of Public Health, 2001
In 1996 insurees in Germany's statutory health insurance system were given a right to choose their sickness fund. To ensure that all funds had an equal starting position, a risk structure compensation scheme based on income and average expenditure by age and sex was introduced. From an analysis of expenditure and transfers, data on sickness fund membership and a published survey, the following effects can be identified: sickness funds merged, with a reduction in number from 1,221 to 420 between 1993 and 2000; the risk compensation scheme narrowed differences in contribution rates; insurees left the more expensive funds for cheaper ones; and increasing transfer sums indicate further risk segregation. Thus, the compensation mechanism will have to be retained permanently, although modifications are likely.
Health Economics, 2003
In many countries, social health insurance systems are being reformed in favor of more competition among insurers, while premiums are community rated by regulation. The implicit incentives for insurers to engage in risk selection can only be curtailed using appropriate systems of risk-adjusted equalization payments among insurers. To develop these systems, predictors of individual utilization patterns have to be identified, e.g. via regression analysis using previous utilization data. In some countries such as Germany, such data are hardly ever available. In the early nineties, a number of sickness funds participated in an experiment in which individual utilization data were collected. Our data set covers more than 70 000 members of company sickness funds over a 5-year period. We analyze sociodemographic determinants of utilization which could be used as risk adjusters in a risk equalization scheme. Our results suggest that besides age and sex, the set of risk adjusters should include income, family status and a dummy for the last year of life.
The new risk adjustment formula in Germany: Implementation and first experiences
Health Policy, 2013
In Germany risk adjustment is a core element of the regulatory framework of competition between sickness funds. It shall create a level playing field between funds with very heterogeneous risk structures. Prior to 2009 risk adjustment was mainly by a demographic model. In 2009 morbidity based risk adjustment was introduced, embedded in a broader reform of the statutory health insurance system. The new formula covers 80 "severe" or "costly and chronic" diseases structured in a system of hierarchical groups.
Health affairs
The introduction in 1996 of free choice among sickness funds in Germany was accompanied by a "risk structure compensation" (RSC) mechanism based on average spending by age and sex. Because chronically ill people were not adequately taken into account, competition for newly insured consumers concentrated on the healthy. The introduction in 2002 of disease management programs addresses this problem: Insured people in such programs are treated as a separate RSC category, making them a more "attractive" group that no longer generates a deficit. The degree of sickness fund activities and the fierce dispute with physicians are valid indicators that the incentives work.