Scope and Incentives for Risk Selection in Health Insurance Markets With Regulated Competition: A Conceptual Framework and International Comparison

In health insurance markets with regulated competition, regulators face the challenge of preventing risk selection. This paper provides a framework for analyzing the scope (i.e., potential actions by insurers and consumers) and incentives for risk selection in such markets. Our approach consists of three steps. First, we describe four types of risk selection: (a) selection by consumers in and out of the market, (b) selection by consumers between high- and low-value plans, (c) selection by insurers via plan design, and (d) selection by insurers via other channels such as marketing, customer service, and supplementary insurance. In a second step, we develop a conceptual framework of how regulation and features of health insurance markets affect the scope and incentives for risk selection along these four dimensions. In a third step, we use this framework to compare nine health insurance markets with regulated competition in Australia, Europe, Israel, and the United States.

The level of consumer information about health insurance in Nanjing, China

The Chinese government is considering a (regulated) competitive healthcare system. Sufficient consumer information is a crucial pre-condition to benefit from such a change. We conducted a survey on the level of consumer information regarding health insurance among the insured population in Nanjing, China in 2009. The results from descriptive analysis and binary logistic regression demonstrate that the current level of consumer information about health insurance is low. The level of consumer information is positively correlated with the subscribers' motivation to obtain the information and its availability. The level of searching for health insurance information is also low; moreover, even upon searching, the chance of finding relevant information is less than 25%. We conclude that the level of consumer information is currently insufficient in China. If the Chinese government is determined to adopt market mechanisms in the healthcare sector, it should take the lead in making valid and reliable information publicly available and easily accessible.

Regulated competition and citizen participation: lessons from Israel

OBJECTIVE: To investigate the relationship between health system structure and citizen participation, in particular whether increased reliance on competition encourages or depresses citizen involvement. SETTING: The case of Israel's ongoing health reform, based on regulated competition among sick funds, is examined. DESIGN: Interviews with government officials and representatives of consumer groups; analysis of policy documents, judicial rulings, public surveys and journalistic accounts. RESULTS: The Israeli reform is based in large measure on a regulated competition model, in which citizens have free choice among highly regulated competing sick funds. At the same time, the reform process has been accompanied by legal, institutional and political frameworks, as well as significant interest group activity, all aimed at increasing public input into processes of health policy making and implementation. The Israeli case, it is argued, lends support to the proposition that citizen participation (voice) and individual choice (exit) are complementary, rather than alternative, modes of ensuring citizen influence over health services. The question is whether the development of multiple avenues for citizen involvement represents disarray or a healthy social learning process regarding the running of the health system. CONCLUSION: This paper expresses cautious optimism that citizen participation is a projection of a healthy social learning process, and suggests directions for public policy to encourage this outcome.