Abstract
European health care systems will face major challenges in the near future. Demographic change and technological progress induce rising costs. In order to deal with these developments and to preserve the current level of health care provision, health care systems need to be highly efficient. Yet existing health care systems show a lot of inefficiencies that result in waste of scarce resources. Therefore, improvements in performance are necessary. In this article, we argue that a change in financing health care accompanied by the liberalisation of the market for health care service providers offers a promising solution. We develop a market-based model for financing health care and show how it can be put into practice without generating additional costs for society while meeting social equity criteria.
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Notes
Technological progress can however be introduced in the model without changing the main results—see e.g. [13].
For simplicity, we assume the interest rate to be zero.
[12] shows this verbally.
Verbally see [5], pp 111–121.
[4] shows the transition process for pension systems.
See [10] for a literature overview.
Insured individuals who wish to be insured with a different insurance company that needs more ageing provisions can do so by paying a surcharge on the premium.
The following paragraphs follow Sect. 2.4 from [1].
Insurance companies have vast health related data of their insured at their disposal, so that it should be possible to estimate future health costs with relevant historical data.
For a discussion of the other possibilities see [1].
See e.g. [21] p. 185 for an overview.
See e.g. [3].
See also Tabarrok [17], who develops a model for genetic insurance.
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Arentz, C., Eekhoff, J. & Kochskämper, S. Private health insurance: a role model for European health systems. Eur J Health Econ 13, 615–621 (2012). https://doi.org/10.1007/s10198-012-0406-7
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DOI: https://doi.org/10.1007/s10198-012-0406-7