Aging of Society and New Medical Technology: The Challenge for Health Insurers to Meet the Expectations of Consumers and Governments

3. Can the resistance against Managed Care-type restrictions be overcome?
The evidence to be presented below concerns restrictions of the Managed Care-type such as gatekeeping by physicians and lists of preferred providers. It is experimental, coming from hypothetical rather than actual choices. Admittedly, experimental evidence is second best for economists, their gold standard being effective choices. However, health insurers have been hesitant to introduce product innovations of the Managed Care type, likely because of the two difficulties cited above. The experiments to be reported are of the Discrete Choice type (DCE); they make respondents repeatedly choose between a status quo and an alternative with changing attributes.
One DCE involved about 600 respondents from the Netherlands in 2006, after a major pro-choice reform. It is of particular interest for three reasons. First, the ‘firewalls’ between social and private health insurance had been torn down as part of the reform, creating a level playing field for the two types of competitors. Second, Dutch citizens had been subject to gatekeeping by physicians, a MC feature, for several years. Therefore, offering them a (hypothetical) return to free physician choice might not trigger too much willingness to pay (WTP). Third, a similar DCE had been performed in Germany, where the status quo continues to be free physician choice, while policymakers are considering introducing gatekeeping as a Managed Care feature.
Table 1 contains a few surprises. First, the choices made by the Dutch respondents reveal that after years of gatekeeping, they would still display positive WTP for a return to free physician choice. Interestingly, the WTP value is maximum in the middle age group (Euro 106/year) rather than the oldest (Euro 67/year). Conversely, although enrolled in social insurance, the oldest German age group in the sample would have to be compensated even at the tune of Euro 158/year for accepting a transition from free physician choice to gatekeeping. Likely due to its lock-in effect, a physician network is resisted by the Dutch across the three age groups in spite of their experience with gatekeeping. Not surprisingly, this is even more true for the Germans, who have free physician choice as their status quo. Compensation values jump up in case the health insurer was to compose a physician list also including specialists. Here, the lock-in effect is apparently most feared by respondents in the highest age group, resulting in a required compensation of Euro 174/year among the Dutch and even Euro 375/year among the Germans. To put these WTP values in perspective, they amount to some 4.7 percent of average annual contribution in the Netherlands (Euro 3,700 in the sample, not counting public subsidies) and 12.5 percent of the employee share of the contribution in Germany (Euro 3,000, topped up by employers).

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