Direct versus indirect standaardization in risk adjustment

Direct and indirect standardization procedures aim at comparing differences in health or differences in health care expenditures between subgroups of the population after controlling for observable morbidity differences. There is a close analogy between this problem and the issue of risk adjustment in health insurance. We analyse this analogy within the theoretical framework proposed in the recent social choice literature on responsibility and compensation. Traditional methods of risk adjustment are analogous to indirect standardization. They are equivalent to the so-called conditional egalitarian mechanism in social choice. In general, they do not remove incentives for risk selection, even if the effect of non-morbidity variables is correctly taken into account. A method of risk adjustment based on direct standardization (as proposed for Ireland) does remove the incentives for risk selection, but at the cost of violating a neutrality condition, stating that insurers should receive the same premium subsidy for all members of the same risk group. Direct standardization is equivalent to the egalitarianequivalent (or proportional) mechanism in social choice. The conflict between removing incentives for risk selection and neutrality is unavoidable if the health expenditure function is not additively separable in the morbidity and efficiency variables.

Supplementary health insurance as a tool for risk-selection in mandatory basic health insurance markets

As the share of supplementary health insurance (SI) in health care finance is likely to grow, SI may become an increasingly attractive tool for risk-selection in basic health insurance (BI). In this paper, we develop a conceptual framework to assess the probability that insurers will use SI for favourable risk-selection in BI. We apply our framework to five countries in which risk-selection via SI is feasible: Belgium, Germany, Israel, the Netherlands, and Switzerland. For each country, we review the available evidence of SI being used as selection device. We find that the probability that SI is and will be used for risk-selection substantially varies across countries. Finally, we discuss several strategies for policy makers to reduce the chance that SI will be used for risk-selection in BI market

The introduction of hospital networks in Belgium : the path from policy statements to the 2019 legislation

In April 2015, the Belgian Federal Minister for Social Affairs and Public Health launched an Action Plan to reform the hospital landscape. With the creation of "localregional clinical hospital networks" with their own governance structures, the plan follows the international trend towards hospital consolidation and collaboration. The major complicating factors in the Belgian context are (1) that policy instruments for the redesign of the hospital service delivery system are divided between the federal government and the federated authorities, which can result in an asymmetric hospital landscape with a potentially better distribution of clinical services in the Flanders hospital collaborations than in the other federated entities; and (2) the current regulations stipulate that only hospitals (and not networks) are entitled to hospital budgets. Although the reform is the most significant and drastic transformation of the Belgian hospital sector in the last three decades, networks mainly offer a framework in which hospitals can collaborate. More regulation and policy measures are needed to enhance collaboration and distribution of clinical services