Title: Prior health expenditures and risk sharing with insurers competing on quality
Authors: Marchand, M ×
Sato, M
Schokkaert, Erik #
Issue Date: 2003
Publisher: Rand
Series Title: Rand journal of economics vol:34 issue:4 pages:647-669
Abstract: Insurers can exploit the heterogeneity within risk-adjustment classes to select the good risks because they have more information than the regulator on the expected expenditures of individual insurees. To counteract this cream skimming, mixed systems combining capitation and cost-based payments have been adopted that do not, however, generally use the past expenditures of insurees as a risk adjuster. In this article, two symmetric insurers compete for clients by differentiating the quality of service offered to them according to some private information about their risk. In our setting it is always welfare improving to use prior expenditures as a risk adjuster.
ISSN: 0741-6261
Publication status: published
KU Leuven publication type: IT
Appears in Collections:Research Center of Public Economics, Leuven
× corresponding author
# (joint) last author

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