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- Title
Modest risk-sharing significantly reduces health plans' incentives for service distortion.
- Authors
Brammli-Greenberg, Shuli; Glazer, Jacob; Waitzberg, Ruth
- Abstract
Public payers often use payment mechanisms as a way to improve the efficiency of the healthcare system. One source of inefficiency is service distortion (SD) in which health plans over/underprovide services in order to affect the mix of their enrollees. Using Israeli data, we apply a new measure of SD to show that a mixed payment scheme, with a modest level of cost-sharing, yields a significant improvement over a pure risk-adjustment scheme. This observation implies that even though mixed systems induce overprovision of some services, their benefits far outweigh their costs.
- Subjects
HEALTH planning; ADVERSE selection (Insurance); MANAGED care programs; CANCER treatment; PHARMACEUTICAL policy; INSURANCE statistics; DECISION making; LABOR incentives; MEDICAL care; PAY for performance; RISK assessment
- Publication
European Journal of Health Economics, 2019, Vol 20, Issue 9, p1359
- ISSN
1618-7598
- Publication type
journal article
- DOI
10.1007/s10198-019-01102-w