Risk adjustment in competitive health plan markets
In: Handbook of Health Economics
AbstractIn 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 InfoIf you experience problems downloading a file, check if you have the proper application to view it first. 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.
This chapter was published in:
This item is provided by Elsevier in its series Handbook of Health Economics with number 1-14.
Contact details of provider:
Web page: http://www.elsevier.com/wps/find/bookseriesdescription.cws_home/BS_HE/description
Find related papers by JEL classification:
- I1 - Health, Education, and Welfare - - Health
You can help add them by filling out this form.
CitEc Project, subscribe to its RSS feed for this item.
This item has more than 25 citations. To prevent cluttering this page, these citations are listed on a separate page. reading list or among the top items on IDEAS.Access and download statisticsgeneral information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Wendy Shamier).
If references are entirely missing, you can add them using this form.