Acceptable costs and risk adjustment: Policy choices and ethical trade-offs
AbstractThe main objective of risk adjustment in systems of regulated competition on health insurance markets is the removal of incentives for undesirable risk selection. We introduce a simple conceptual framework to clarify how the definition of "acceptable costs" and the distinction between legitimate and illegitimate risk adjusters imply difficult ethical trade-offs between equity, avoidance of undesirable risk selection and cost-effectiveness. Focusing on the situation in Belgium, Germany, Israel, the Netherlands and Switzerland, we show how differences in the importance attached to solidarity and in the beliefs about market efficiency, have led to different decisions with respect to the definition of the basic benefits package, the choice of risk-adjusters, the possibilities of managed care, the degree of consumer choice and the relative importance of income-related financing sources in the overall system.
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Bibliographic InfoPaper provided by Katholieke Universiteit Leuven in its series Open Access publications from Katholieke Universiteit Leuven with number urn:hdl:123456789/119264.
Date of creation: 2006
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Costs; Cost; Risk; Policy; Choice;
Other versions of this item:
- Erik Schokkaert & Konstantin Beck & Amir Shmueli & Wynand Van De Ven & Carine Van De Voorde & Jürgen Wasem, 2006. "Acceptable costs and risk adjustment: policy choices and ethical trade-offs," Center for Economic Studies - Discussion papers ces0619, Katholieke Universiteit Leuven, Centrum voor Economische Studiën.
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- Erik SCHOKKAERT & Carine VAN DE VOORDE, 2000.
"Risk Selection and the Specification of the Conventional Risk Adjustment Formula,"
Center for Economic Studies - Discussion papers
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- Schokkaert, Erik & Van de Voorde, Carine, 2000. "Risk selection and the specification of the conventional risk adjustment formula," Open Access publications from Katholieke Universiteit Leuven urn:hdl:123456789/121646, Katholieke Universiteit Leuven.
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