Capping risk adjustment?

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Capping risk adjustment? / Eugster, Patrick; Sennhauser, Michèle; Zweifel, Peter.
In: Journal of Health Economics, Vol. 29, No. 4, 01.07.2010, p. 499-507.

Research output: Journal contributionsJournal articlesResearchpeer-review

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Eugster P, Sennhauser M, Zweifel P. Capping risk adjustment? Journal of Health Economics. 2010 Jul 1;29(4):499-507. doi: 10.1016/j.jhealeco.2010.04.001

Bibtex

@article{49454dde8cba4d4bafaf10639faabbc6,
title = "Capping risk adjustment?",
abstract = "When premiums are community-rated, risk adjustment (RA) serves to mitigate competitive insurers' incentive to select favorable risks. However, unless fully prospective, it also undermines their incentives for efficiency. By capping its volume, one may try to counteract this tendency, exposing insurers to some financial risk. This in term runs counter the quest to refine the RA formula, which would increase RA volume. Specifically, the adjuster, {"}Hospitalization or living in a nursing home during the previous year{"} will be added in Switzerland starting 2012. This paper investigates how to minimize the opportunity cost of capping RA in terms of increased incentives for risk selection.",
keywords = "Health sciences, Adult, Aged, Aged, 80 and over, Efficiency, Organizational, Female, Government Regulation, Hospitalization, Humans, Insurance Selection Bias, Insurance, Health, Male, Managed Competition, Middle Aged, Motivation, Nursing Homes, Questionnaires, Risk Adjustment, Switzerland, Young Adult",
author = "Patrick Eugster and Mich{\`e}le Sennhauser and Peter Zweifel",
year = "2010",
month = jul,
day = "1",
doi = "10.1016/j.jhealeco.2010.04.001",
language = "English",
volume = "29",
pages = "499--507",
journal = "Journal of Health Economics",
issn = "0167-6296",
publisher = "Elsevier B.V.",
number = "4",

}

RIS

TY - JOUR

T1 - Capping risk adjustment?

AU - Eugster, Patrick

AU - Sennhauser, Michèle

AU - Zweifel, Peter

PY - 2010/7/1

Y1 - 2010/7/1

N2 - When premiums are community-rated, risk adjustment (RA) serves to mitigate competitive insurers' incentive to select favorable risks. However, unless fully prospective, it also undermines their incentives for efficiency. By capping its volume, one may try to counteract this tendency, exposing insurers to some financial risk. This in term runs counter the quest to refine the RA formula, which would increase RA volume. Specifically, the adjuster, "Hospitalization or living in a nursing home during the previous year" will be added in Switzerland starting 2012. This paper investigates how to minimize the opportunity cost of capping RA in terms of increased incentives for risk selection.

AB - When premiums are community-rated, risk adjustment (RA) serves to mitigate competitive insurers' incentive to select favorable risks. However, unless fully prospective, it also undermines their incentives for efficiency. By capping its volume, one may try to counteract this tendency, exposing insurers to some financial risk. This in term runs counter the quest to refine the RA formula, which would increase RA volume. Specifically, the adjuster, "Hospitalization or living in a nursing home during the previous year" will be added in Switzerland starting 2012. This paper investigates how to minimize the opportunity cost of capping RA in terms of increased incentives for risk selection.

KW - Health sciences

KW - Adult

KW - Aged

KW - Aged, 80 and over

KW - Efficiency, Organizational

KW - Female

KW - Government Regulation

KW - Hospitalization

KW - Humans

KW - Insurance Selection Bias

KW - Insurance, Health

KW - Male

KW - Managed Competition

KW - Middle Aged

KW - Motivation

KW - Nursing Homes

KW - Questionnaires

KW - Risk Adjustment

KW - Switzerland

KW - Young Adult

U2 - 10.1016/j.jhealeco.2010.04.001

DO - 10.1016/j.jhealeco.2010.04.001

M3 - Journal articles

C2 - 20462647

VL - 29

SP - 499

EP - 507

JO - Journal of Health Economics

JF - Journal of Health Economics

SN - 0167-6296

IS - 4

ER -