How can we prevent cream skimming in a competitive health insurance market?

The great challenge for the 90’s
  • Wynand P. M. M. van de Ven
  • René C. J. A. van Vliet
Chapter
Part of the Developments in Health Economics and Public Policy book series (HEPP, volume 1)

Abstract

Recently in many countries market oriented strategies have been implemented or proposed in order to improve efficiency in health care. In several countries (e.g. the Netherlands, Australia, Germany, Israel, Switzerland and the United States of America (USA)) an essential aspect of these strategies is that competing insurers receive a risk-adjusted premium-replacing payment per insured. In return the insurers are responsible for paying for or delivering the services as described in the benefits package. The payment per insured is dependent on the risk category to which the insured belongs and provides the insurer with an incentive for efficiency. However, if the risk groups are heterogeneous, cream skimming may arise, resulting in adverse effects to society in terms of reduced (incentives for) quality and efficiency of care.

Keywords

Health Maintenance Organization Benefit Package Capitation Payment Potential Profit Functional Health Status 
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Copyright information

© Springer Science+Business Media Dordrecht 1992

Authors and Affiliations

  • Wynand P. M. M. van de Ven
    • 1
  • René C. J. A. van Vliet
    • 1
  1. 1.Department of Health Policy and Management, College of Medicine and Health SciencesErasmus UniversityRotterdamThe Netherlands

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