Guest lecture risk equalization
Economics of the Dutch health care system
Minor Health Care Management
VU University Amsterdam
Slides
The slides of the lecture are not included here, they are on the blackboard of your university.
Flow chart
In this talk, there was a central role for a flow diagram connecting competition -> regulation -> incentives -> behavior -> effects. You can watch an interactive version of this flow chart in 6 slides in English or in Dutch.
After a first watch, try to tell the story behind these slides in your own words. It is a good test and will help you to spot the parts that you might not fully understand yet. You may then read slides from your blackboard to help you fill in the blanks.
As examples, I mentioned three negative effects of the selection problem on efficiency and three negative effects on equity. In a working paper that I co-authored, we presented a list of all potential negative effects that might arise because of selection.1 In addition, we list the positive and negative effects of implementing risk equalization (yes, there are some negative effects too, which I have not discussed in my talk!).
1 Van Kleef et al. (2022)
Risk equalization app
You can find the risk equalization app here. Just play around to get the hang of it.
Solutions to the selection problem
In the last part of this talk, we looked at the behavior and effects of the selection problem that we identified at the Dutch health insurance market.2 At the end of it, I referred to an article that I wrote about this subject in the so-called VGE Bulletin, a publication of the Dutch-Flemish Association for Health Economics (VGE). This article has not been published before this talk but is now available for you to read.3
This article contains a list of potential solutions worthy of further investigation. My current favorite is the potential solution mentioned last in this list. It is noteworthy that this one has also been discussed in Switzerland, which is another health insurance market where a selection problem exists. Check the article to find out which potential solution is my favorite.
Food for thought
The goal of risk equalization was explicitly described in detail in the Dutch Health Insurance Act (2006) about here. It is interesting to read and may slightly differ from how it was described in my talk.
Surprisingly, despite a long history of developing a very sophisticated risk equalization model, currently there is much discussion about the goal of risk equalization in the Netherlands. I co-authored an article with a summary of this debate in which we also propose a way out of this controversy.4
4 van de Ven et al. (2022)
Lastly, note that some people have high expectations about solving economic problems in health insurance and health care by risk equalization. To put these expectations into context, I authored an article (in Dutch) claiming that risk equalization is not a panacea.5
5 P. J. A. Stam, Visser, and Goudriaan (2015)
All in all, given these debates, it is important to get a better understanding of risk equalization in order to be able to judge what’s right and what’s wrong.
Last remarks
These were the first few references that are nice to read/view. They already give you much to think about. Have a look at the contact details on the front page of my personal website if you have a question and want to get in touch.
References
Citation
@online{stam2023,
author = {Stam, Piet},
title = {Guest Lecture Risk Equalization},
date = {2023-10-06},
url = {http://talks.pietstam.nl//2023-10-06-vu-risk-equalization},
langid = {en}
}