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Supply-side and demand-side cost sharing in deregulated social health insurance: Which is more effective?

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  • Trottmann, Maria
  • Zweifel, Peter
  • Beck, Konstantin

Abstract

Microeconomic theory predicts that if patients are fully insured and providers are paid fee-for-service, utilization of medical services exceeds the efficient level (‘moral hazard effect’). In Switzerland, both demand-side and supply-side cost sharing have been introduced to mitigate this problem. Analyzing a panel dataset of about 160,000 adults, we find both types of cost sharing to be effective in curtailing the use of medical services. However, when moral hazard mitigation is traded off against risk selection, the minimum-deductible, supply-side cost sharing option ranks first, followed by the medium-deductible demand-side alternative, making the supply-side option somewhat more effective.

Suggested Citation

  • Trottmann, Maria & Zweifel, Peter & Beck, Konstantin, 2012. "Supply-side and demand-side cost sharing in deregulated social health insurance: Which is more effective?," Journal of Health Economics, Elsevier, vol. 31(1), pages 231-242.
  • Handle: RePEc:eee:jhecon:v:31:y:2012:i:1:p:231-242
    DOI: 10.1016/j.jhealeco.2011.10.004
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    References listed on IDEAS

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    Cited by:

    1. Stefan Boes & Michael Gerfin, 2016. "Does Full Insurance Increase the Demand for Health Care?," Health Economics, John Wiley & Sons, Ltd., vol. 25(11), pages 1483-1496, November.
    2. repec:ces:ifodic:v:11:y:2013:i:1:p:19078507 is not listed on IDEAS
    3. Shmueli, Amir & Stam, Piet & Wasem, Jürgen & Trottmann, Maria, 2015. "Managed care in four managed competition OECD health systems," Health Policy, Elsevier, vol. 119(7), pages 860-873.
    4. K. P. M. Winssen & R. C. Kleef & W. P. M. M. Ven, 2017. "A voluntary deductible in health insurance: the more years you opt for it, the lower your premium?," The European Journal of Health Economics, Springer;Deutsche Gesellschaft für Gesundheitsökonomie (DGGÖ), vol. 18(2), pages 209-226, March.
    5. Chung Jen Yang & Ying Che Tsai & Joseph J. Tien, 2017. "The Impacts of Persistent Behaviour and Cost-Sharing Policy on Demand for Outpatient Visits by the Elderly: Evidence from Taiwan’s National Health Insurance," The Geneva Papers on Risk and Insurance - Issues and Practice, Palgrave Macmillan;The Geneva Association, vol. 42(1), pages 31-52, January.
    6. repec:spr:hecrev:v:7:y:2017:i:1:d:10.1186_s13561-017-0156-4 is not listed on IDEAS
    7. Rischatsch, Maurus, 2015. "Who joins the network? Physicians’ resistance to take budgetary co-responsibility," Journal of Health Economics, Elsevier, vol. 40(C), pages 109-121.
    8. Stefan Pichler & Jan Ruffner, 2016. "Does it really make a difference? Health care utilization with two high deductible health care plans," KOF Working papers 16-404, KOF Swiss Economic Institute, ETH Zurich.
    9. Maurus Rischatsch & Peter Zweifel, 2013. "What do physicians dislike about managed care? Evidence from a choice experiment," The European Journal of Health Economics, Springer;Deutsche Gesellschaft für Gesundheitsökonomie (DGGÖ), vol. 14(4), pages 601-613, August.
    10. repec:eee:jhecon:v:55:y:2017:i:c:p:262-273 is not listed on IDEAS

    More about this item

    Keywords

    Health insurance; Moral hazard; Managed care; Copayment; Two-stage residual inclusion;

    JEL classification:

    • I13 - Health, Education, and Welfare - - Health - - - Health Insurance, Public and Private
    • G22 - Financial Economics - - Financial Institutions and Services - - - Insurance; Insurance Companies; Actuarial Studies
    • D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information; Mechanism Design

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