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Supplementary Private Health Insurance in Selected Countries: Lessons for EU Governments?

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  • Sebastian Gechert

Abstract

A famous idea to maintain affordable health expenditures is to cut back statutory health insurance (SHI) to a basic insurance and to introduce supplementary private health insurance (PHI), permitted to cover the remaining benefits and to apply managed care mechanisms. The measure is supposed to lower public health expenditures and to enhance cost efficiency and quality of service. To test these reasonings, the paper draws empirical evidence from the health systems of Australia, Canada and Switzerland. PHI fails to meet the claims in these countries, since it performs worse than SHI concerning cost development and cannot be expected to improve quality. Cream skimming and adverse selection arise instead. Therefore, regulations and incentives are necessary, but they might counteract the aim of lowering public health expenditures.

Suggested Citation

  • Sebastian Gechert, 2009. "Supplementary Private Health Insurance in Selected Countries: Lessons for EU Governments?," CESifo Working Paper Series 2739, CESifo Group Munich.
  • Handle: RePEc:ces:ceswps:_2739
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    File URL: http://www.cesifo-group.de/DocDL/cesifo1_wp2739.pdf
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    References listed on IDEAS

    as
    1. Beck, Konstantin & Spycher, Stefan & Holly, Alberto & Gardiol, Lucien, 2003. "Risk adjustment in Switzerland," Health Policy, Elsevier, vol. 65(1), pages 63-74, July.
    2. repec:aph:ajpbhl:10.2105/ajph.2002.013466_0 is not listed on IDEAS
    3. Glied, Sherry, 2000. "Managed care," Handbook of Health Economics,in: A. J. Culyer & J. P. Newhouse (ed.), Handbook of Health Economics, edition 1, volume 1, chapter 13, pages 707-753 Elsevier.
    4. Newhouse, Joseph P., 1982. "Is competition the answer?," Journal of Health Economics, Elsevier, vol. 1(1), pages 109-116, May.
    5. repec:dau:papers:123456789/1623 is not listed on IDEAS
    6. Stefan Greß & Maral Manouguian & Jürgen Wasem, 2007. "Health Insurance Reform in the Netherlands," ifo DICE Report, ifo Institute - Leibniz Institute for Economic Research at the University of Munich, vol. 5(1), pages 63-67, 05.
    7. Brigitte Dormont & Pierre-Yves Geoffard & Karine Lamiraud, 2009. "The influence of supplementary health insurance on switching behaviour: evidence from Swiss data," Health Economics, John Wiley & Sons, Ltd., vol. 18(11), pages 1339-1356.
    8. Barr, Nicholas, 1992. "Economic Theory and the Welfare State: A Survey and Interpretation," Journal of Economic Literature, American Economic Association, vol. 30(2), pages 741-803, June.
    9. Paolucci, Francesco & Schut, Erik & Beck, Konstantin & Greß, Stefan & Van De Voorde, Carine & Zmora, Irit, 2007. "Supplementary health insurance as a tool for risk-selection in mandatory basic health insurance markets," Health Economics, Policy and Law, Cambridge University Press, vol. 2(02), pages 173-192, April.
    10. Dana P. Goldman, 1995. "Managed Care as a Public Cost-Containment Mechanism," RAND Journal of Economics, The RAND Corporation, vol. 26(2), pages 277-295, Summer.
    11. McClellan, Mark & Cutler, David & Newhous, Joseph P., 2000. "How Does Managed Care Do It?," Scholarly Articles 2643884, Harvard University Department of Economics.
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    Cited by:

    1. Yu-Fu Chen & Michael Funke, 2010. "Booms, Recessions And Financial Turmoil: A Fresh Look At Investment Decisions Under Cyclical Uncertainty," Scottish Journal of Political Economy, Scottish Economic Society, vol. 57(s1), pages 290-317, July.
    2. Mazzanti, Giovanni Maria & Fiorentini, Gianluca, 2012. "Proposte per una revisione del finanziamento e dell’offerta dei servizi odontoiatrici in Italia. L’intervento pubblico e i fondi integrativi," AICCON Working Papers 100-2012, Associazione Italiana per la Cultura della Cooperazione e del Non Profit.
    3. Alessandro Petretto, 2013. "On the Fuzzy Boundaries between Public and Private in Health-Care Organization and Funding Systems," Rivista di Politica Economica, SIPI Spa, issue 1, pages 327-370, January-M.
    4. Kumpmann, Ingmar, 2009. "Monopolistic Competition and Costs in the Health Care Sector," IWH Discussion Papers 17/2009, Halle Institute for Economic Research (IWH).

    More about this item

    Keywords

    private health insurance; supplementary; country survey;

    JEL classification:

    • G22 - Financial Economics - - Financial Institutions and Services - - - Insurance; Insurance Companies; Actuarial Studies
    • H51 - Public Economics - - National Government Expenditures and Related Policies - - - Government Expenditures and Health
    • I11 - Health, Education, and Welfare - - Health - - - Analysis of Health Care Markets
    • I18 - Health, Education, and Welfare - - Health - - - Government Policy; Regulation; Public Health
    • L10 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - General

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