In the 1990s many countries have chosen to use prospective payment arrangements for health plans (e.g., health insurers, sickness funds or HMOs) together with health plan competition, as a means of creating incentives to be cost conscious, while preserving quality, innovation and responsiveness to consumer preferences. Risk adjustment is an important mechanism for attenuating problems that threaten the effectiveness of this strategy for resource allocation in health care. Without adequate risk adjustment, competing health plans have incentives to avoid individuals with predictable losses and to select predictably profitable members. This selection and the resulting risk segmentation can have adverse effects in terms of access to care, quality of care and efficiency in the production of care.This chapter first provides a conceptual framework for thinking about risk adjustment. Second, it gives an overview of the progress developing risk adjustment models in recent years. Third, several forms of risk sharing are discussed, which can be used as a tool for reducing selection in case of imperfect risk adjustment. Fourth, an overview is given of the current practice of risk adjustment and risk sharing in 11 countries. Finally some directions for future research are discussed.
Download Info
To download:
If you experience problems downloading a file, check if you have the
proper application to
view it first. Information about this may be contained
in the File-Format links below. In case of further problems read
the IDEAS help
page. Note that these files are not on the IDEAS
site. Please be patient as the files may be large.
As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.
Publisher Info
Download reference. The following formats are available: HTML
(with abstract),
plain text
(with abstract),
BibTeX,
RIS (EndNote, RefMan, ProCite),
ReDIF This chapter was published in: A. J. Culyer & J. P. Newhouse (ed.) Handbook of Health Economics, , chapter 14, pages 755-845, 2000.
For technical questions regarding this item, or to correct its listing, contact: (Heidi Boesdal).
Related research
This chapter was published in the following book, which is listed on IDEAS: A. J. Culyer & J. P. Newhouse (ed.), 2000.
"Handbook of Health Economics,"
Handbook of Health Economics,
Elsevier,
edition 1, volume 1, number 1, September.
[Downloadable!] (restricted) Keywords:
Find related papers by JEL classification: I1 - Health, Education, and Welfare - - Health
Cited by: (explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)