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Health Insurance Competition in Germany - the Role of Advertising

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  • Bettina Becker
  • Silke Uebelmesser

Abstract

In the 1990s, competition among health insurance funds (‘sickness funds’) was introduced in Germany. As one means of competition, free choice of initial health funds and subsequent switching between them was made available to all insured. Since then, the number of funds has decreased substantially, and funds have had to engage in competitive strategies to remain in the market. In this paper, we want to analyse the funds’ advertising activities in the face of the changed competitive environment. This has not been possible to date due to a lack of data. We use two new datasets to get a first insight into the potential effects of competition on funds’ advertising strategies; one of the volume and cost of advertisements and one of their contents. Our results suggest that competition has been associated with an increase in the amount of advertising. As to the adverts themselves, we find that there was a decrease in the share of advertisements of a ‘general’ content in favour of advertisements of a more ‘fund-specific’ content. The data therefore indicate that once the market was open to switching of funds by the insured, funds’ advertising efforts changed to differentiating their own perceived strengths from those of competitor funds. These observations allow us to draw some tentative conclusions about the relevance of (attempts of) risk selection by health funds via advertisements and about the general success of the pro-competitive legislation.

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Bibliographic Info

Article provided by Duncker & Humblot, Berlin in its journal Schmollers Jahrbuch.

Volume (Year): 130 (2010)
Issue (Month): 2 ()
Pages: 169-194

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Handle: RePEc:aeq:aeqsjb:v130_y2010_i2_q2_p169-194

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References

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  1. Buchner, Florian & Wasem, Jurgen, 2003. "Needs for further improvement: risk adjustment in the German health insurance system," Health Policy, Elsevier, vol. 65(1), pages 21-35, July.
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  15. Gre[ss], Stefan & Groenewegen, Peter & Kerssens, Jan & Braun, Bernard & Wasem, Juergen, 2002. "Free choice of sickness funds in regulated competition: evidence from Germany and The Netherlands," Health Policy, Elsevier, vol. 60(3), pages 235-254, June.
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Cited by:
  1. Walter Krämer, 2011. "The Cult of Statistical Significance – What Economists Should and Should Not Do to Make their Data Talk," Schmollers Jahrbuch : Journal of Applied Social Science Studies / Zeitschrift für Wirtschafts- und Sozialwissenschaften, Duncker & Humblot, Berlin, vol. 131(3), pages 455-468.

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