Health Insurance Competition in Germany - The Role of Advertising
AbstractIn 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 InfoPaper provided by Department of Economics, Loughborough University in its series Discussion Paper Series with number 2010_05.
Date of creation: Mar 2010
Date of revision: Mar 2010
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More information through EDIRC
Regulated competition; health insurance market; risk selection; advertising; Germany;
Other versions of this item:
- Bettina Becker & Silke Uebelmesser, 2010. "Health Insurance Competition in Germany - the Role of Advertising," Schmollers Jahrbuch : Journal of Applied Social Science Studies / Zeitschrift für Wirtschafts- und Sozialwissenschaften, Duncker & Humblot, Berlin, vol. 130(2), pages 169-194.
- I11 - Health, Education, and Welfare - - Health - - - Analysis of Health Care Markets
- I18 - Health, Education, and Welfare - - Health - - - Government Policy; Regulation; Public Health
- G22 - Financial Economics - - Financial Institutions and Services - - - Insurance; Insurance Companies; Actuarial Studies
- M37 - Business Administration and Business Economics; Marketing; Accounting - - Marketing and Advertising - - - Advertising
This paper has been announced in the following NEP Reports:
- NEP-ALL-2010-03-20 (All new papers)
- NEP-COM-2010-03-20 (Industrial Competition)
- NEP-HEA-2010-03-20 (Health Economics)
- NEP-IAS-2010-03-20 (Insurance Economics)
- NEP-MKT-2010-03-20 (Marketing)
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.:
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