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

Conclusion 2:
In both the Netherlands and Germany, Managed-Care-type restrictions such as gatekeeping by physicians, a physician network, and a physician list including specialists would have to be compensated by a reduction of the contribution to health insurance. While the highest age group does not necessarily resist these features more strongly than the others, it does so in both countries with respect to the physician list.
However, health insurers could also reign in moral hazard towards the end of human life by offering policies with changed financial incentives. The classic tool of course is the deductible, to be set at Euro 500 annually in both DCEs. This would have to be compensated very highly across all age groups in the Netherlands, reaching a maximum of Euro 448/year in the middle age group. Among the German respondents, resistance is less marked, with required compensation reaching Euro 311/year, again in the middle age group. One explanation for this striking difference is the fact that as a consequence of changes in short-term disability insurance, Dutch workers have been exposed to substantial financial risk whereas their German counterparts continue to enjoy ample protection during a full year.

Table 1. Mean WTP values, Netherlands (2006) and Germany (2005, socially insured only), by age group, in Euro/year

All values are statistically distinguishable from zero at a confidence level of 99 percent or better (except three values in italics); values in bold indicate values that are more strongly negative among the highest age group than for the others.
Source: Zweifel and Becker-Leukert (2007), chs. 8 and 9.

Therefore, the Dutch are subject to a higher ‘pain of risk-bearing’ (Eeckhoudt and Schlesinger, 2006) than the Germans since their Euro 500 deductible may accumulate with the income loss due to short-term disability. Likely for the same reason, the Dutch are ambivalent with regard to an annual premium rebate for no claims amounting to Euro 500, although they had a bonus of this type reaching a maximum of Euro 255 in the status quo (it has been abandoned since). The Dutch WTP values in Table 1, while negative, are not distinguishable from zero in any age group. By way of contrast, the Germans seem to like the bonus proposal, their positive WTP attaining its maximum in the top age group (although the difference from the other two groups is statistically insignificant). Being highly protected from the income risk associated with short-term disability, they seem to be prepared to pay the first Euro 500 of HCE themselves in order to save their bonus. Yet the Dutch and Germans agree that a bonus is far more acceptable than a deductible of the same amount. At first blush, this is puzzling: After all, for preserving the bonus, they would have to come up with the first Euro 500 themselves; therefore, bonus and deductible of the same amount appear to be equivalent. However, patients in fact are exposed to two losses. First, they have to bear the loss of health, and second, a financial loss of up to Euro 500. In the case of a deductible, Euro 500 must be paid under all circumstances, whereas in the case of a bonus, payment can be deferred to the following years in the guise of higher premiums. In this way, patients can shift the second loss to a future period, which is of value to risk-averse individuals.

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