Abstract:
:In the absence of a perfect risk adjustment scheme, reimbursing health insurers' costs can reduce risk selection in community-rated health insurance markets. In this paper, we develop a model in which insurers determine the cost efficiency of health care and have incentives for risk selection. We derive the optimal cost reimbursement function, which balances the incentives for cost efficiency and risk selection. For health cost data from a Swiss health insurer, we find that an optimal cost reimbursement scheme should reimburse costs only up to a threshold.
journal_name
Health Econjournal_title
Health economicsauthors
Kifmann M,Lorenz Ndoi
10.1002/hec.1614subject
Has Abstractpub_date
2011-05-01 00:00:00pages
532-52issue
5eissn
1057-9230issn
1099-1050journal_volume
20pub_type
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