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Regulated competition in health insurance markets


  • Rudy Douven



The efficient delivery of medical services may be pursued by intensifying competition among health care insurers. This paper develops a model of regulated competition among health care insurers. It shows that increasing competition may foster efficiency-raising activities, reduce insurer profits and lower health care costs. However, it may also increase the variability of consumer premiums and increase risk-type specific selection activities by insurers as the government will generally lack information on the risk characteristics of the insured.

Suggested Citation

  • Rudy Douven, 2000. "Regulated competition in health insurance markets," CPB Research Memorandum 171, CPB Netherlands Bureau for Economic Policy Analysis.
  • Handle: RePEc:cpb:resmem:171

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    References listed on IDEAS

    1. Chalkley, Martin & Malcomson, James M., 1998. "Contracting for health services when patient demand does not reflect quality," Journal of Health Economics, Elsevier, vol. 17(1), pages 1-19, January.
    2. Altman, Daniel & Cutler, David & Zeckhauser, Richard, 2003. "Enrollee mix, treatment intensity, and cost in competing indemnity and HMO plans," Journal of Health Economics, Elsevier, vol. 22(1), pages 23-45, January.
    3. Chalkley, Martin & Malcomson, James M, 1998. "Contracting for Health Services with Unmonitored Quality," Economic Journal, Royal Economic Society, vol. 108(449), pages 1093-1110, July.
    4. Anne Beeson Royalty & Neil Solomon, 1999. "Health Plan Choice: Price Elasticities in a Managed Competition Setting," Journal of Human Resources, University of Wisconsin Press, vol. 34(1), pages 1-41.
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    JEL classification:

    • I11 - Health, Education, and Welfare - - Health - - - Analysis of Health Care Markets
    • I18 - Health, Education, and Welfare - - Health - - - Government Policy; Regulation; Public Health
    • D8 - Microeconomics - - Information, Knowledge, and Uncertainty

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