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Consumer channeling by health insurers: natural experiments with preferred providers in the Dutch pharmacy market

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Author Info

  • Lieke H. H. M. Boonen

    (Institute of Health Policy and Management, Erasmus University of Rotterdam, Rotterdam, The Netherlands)

  • Frederik T. Schut

    (Institute of Health Policy and Management, Erasmus University of Rotterdam, Rotterdam, The Netherlands)

  • Xander Koolman

    (Institute of Health Policy and Management, Erasmus University of Rotterdam, Rotterdam, The Netherlands)

Abstract

Consumer channeling is an important element in the insurer-provider bargaining process. Health insurers can influence provider choice by offering insurance contracts with restricted provider networks. Alternatively, they can offer contracts with unrestricted access and use incentives to motivate consumers to visit preferred providers. Little is known, however, about the effectiveness of this alternative strategy of consumer channeling. Using data from two natural experiments in the Dutch pharmacy market, we examine how consumers respond to incentives used by health insurers to influence their choice of provider. We find that consumers are sensitive to rather small incentives and that temporary incentives may sort a long-term effect on provider choice. In addition, we find that both consumer and provider characteristics determine whether consumers are willing to switch to preferred pharmacies. Copyright © 2007 John Wiley & Sons, Ltd.

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File URL: http://hdl.handle.net/10.1002/hec.1265
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Bibliographic Info

Article provided by John Wiley & Sons, Ltd. in its journal Health Economics.

Volume (Year): 17 (2008)
Issue (Month): 3 ()
Pages: 299-316

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Handle: RePEc:wly:hlthec:v:17:y:2008:i:3:p:299-316

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Web page: http://www3.interscience.wiley.com/cgi-bin/jhome/5749

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Cited by:
  1. Lieke Boonen & Frederik Schut & Bas Donkers & Xander Koolman, 2009. "Which preferred providers are really preferred? Effectiveness of insurers’ channeling incentives on pharmacy choice," International Journal of Health Care Finance and Economics, Springer, vol. 9(4), pages 347-366, December.
  2. Heinemann, Stephanie & Leiber, Simone & Greß, Stefan, 2013. "Managed competition in the Netherlands—A qualitative study," Health Policy, Elsevier, vol. 109(2), pages 113-121.

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