Hostname: page-component-cd9895bd7-dk4vv Total loading time: 0 Render date: 2024-12-22T05:59:55.377Z Has data issue: false hasContentIssue false
  • English
  • Français

Switching rates in health insurance markets decrease with age: empirical evidence and policy implications from the Netherlands

Published online by Cambridge University Press:  15 July 2015

Daniëlle M.I.D. Duijmelinck  and
Wynand P.M.M. van de Ven
Daniëlle M.I.D. Duijmelinck*
Affiliation:
Institute of Health Policy and Management, Erasmus University Rotterdam, Rotterdam, the Netherlands
Wynand P.M.M. van de Ven
Affiliation:
Institute of Health Policy and Management, Erasmus University Rotterdam, Rotterdam, the Netherlands
*
*Correspondence to: Daniëlle M.I.D. Duijmelinck, Institute of Health Policy and Management, Erasmus University Rotterdam, P.O. Box 1738, 3000 DR Rotterdam, the Netherlands. Email: duijmelinck@bmg.eur.nl
Get access Rights & Permissions [Opens in a new window]

Abstract

All consumer groups with specific preferences must feel free to easily switch insurer in order to discipline insurers to be responsive to consumers’ heterogeneous preferences. This paper provides insight into the switching behaviour of low-risks (i.e. young or healthy consumers) and high-risks (i.e. elderly or unhealthy consumers) in the Netherlands in the period 2009–2012. We analysed: (1) administrative data with objective health status information (i.e. medically diagnosed diseases and pharmaceutical use) and information on health care expenses of nearly the entire Dutch population (n=15.3 million individuals) and (2) three-year sample data (n=1152 individuals). Our findings indicate that switching rates strongly decrease with age. For example, in 2009, consumers aged 25–44 switched 10 times more than consumers aged 75 or older. Another finding is that switching rates decrease as the predicted health care expenses increase. Although healthy consumers switch twice as much as unhealthy consumers, this difference becomes much smaller after adjusting for age. We conclude that our findings can be explained by higher perceived switching costs by elderly consumers than by young consumers. Consequently, insurers have low incentives to act as quality-conscious purchasers of care for the elderly consumers. Therefore, strategies should be developed to increase the choice of insurer of elderly consumers.

JEL classification

I18: Government Policy • Regulation • Public Health G22: Insurance • Insurance Companies • Actuarial Studies I11: Analysis of Health Care Markets I13: Health Insurance, Public and Private
Type
Articles
Information
Health Economics, Policy and Law , Volume 11 , Issue 2 , April 2016 , pp. 141 - 159
Check for updates
Copyright
© Cambridge University Press 2015 

Access options

Get access to the full version of this content by using one of the access options below. (Log in options will check for institutional or personal access. Content may require purchase if you do not have access.)

References

Atherly, A., Florence, C. and Thorpe, K. E. (2005), ‘Health plan switching among members of the Federal Employees Health Benefit Program’, Inquiry, 42(3): 255–265.CrossRefGoogle Scholar
Beaulieu, N. D (2002), ‘Quality information and consumer health plan choices’, Journal of Health Economics, 21(1): 43–63.Google Scholar
Boonen, L. H. H. M., Laske-Aldershof, T. and Schut, F. T. (2015), ‘Switching health insurers: the role of price, quality and consumer information search’, European Journal of Health Economics, doi: 10.1007/s10198-015-0681-1.Google Scholar
Brabers, A. E. M., Reitsma-van Rooijen, M. and de Jong, J. D. (2012), ‘The Dutch health insurance system: mostly competition on price rather than quality of care’, Eurohealth, 18(1): 30–33.Google Scholar
Brandon, W. P., Sundaram, R. and Dunham, A. A. (2009), ‘Multiple switching in medicaid managed care: a proportional hazards model’, Journal of Health Care for the Poor and Underserved, 20(4): 1124–1141.Google Scholar
Buchmueller, T. C (2000), ‘The health plan choices of retirees under managed competition’, Health Services Research, 35(5): 949–976.Google ScholarPubMed
De Jong, J., van den Brink-Muinen, A. and Groenewegen, P. P. (2008), ‘The Dutch health insurance reform: switching between insurers, a comparison between the general population and the chronically ill and disabled’, BMC Health Services Research, 8(58): 58–66.Google Scholar
Dormont, B., Geoffard, P. Y. and Lamiraud, K. (2009), ‘The influence of supplementary health insurance on switching behaviour: evidence from Swiss data’, Health Economics, 18(11): 1339–1356.CrossRefGoogle ScholarPubMed
Duijmelinck, D. M. I. D. and van de Ven, W. P. M. M. (2014), ‘Choice of insurer for basic health insurance restricted by supplementary insurance’, European Journal of Health Economics, 15(7): 737–746.Google Scholar
Duijmelinck, D. M. I. D., Mosca, I. and van de Ven, W. P. M. M. (2015), ‘Switching benefits and costs in competitive health insurance markets: a conceptual framework and empirical evidence’, Health Policy, 119(5): 664–671.Google Scholar
Farrell, J. and Klemperer, P. (2007), ‘Coordination and lock-in: competition with switching costs and network effects’, in M. Armstrong and R. Porter (eds), Handbook of Industrial Organization, Amsterdam: North Holland, 1967–2072.Google Scholar
Frank, R. G. and Lamiraud, K. (2009), ‘Choice, price competition and complexity in markets for health insurance’, Journal of Economic Behavior & Organization, 71(2): 550–562.CrossRefGoogle Scholar
Han, J., Ko, D. W. and Urmie, J. M. (2014), ‘The role of satisfaction and switching costs in Medicare Part D choices’, Research in Social and Administrative Pharmacy, 10(2): 398–407.Google Scholar
Handel, B. R (2013), ‘Adverse selection and inertia in health insurance markets: when nudging hurts’, American Economic Review, 103(7): 2643–2682.CrossRefGoogle ScholarPubMed
Hanoch, Y. and Rice, T. (2006), ‘Can limiting choice increase social welfare? The elderly and health insurance’, Milbank Quarterly, 84(1): 37–73.Google Scholar
Hendriks, M., de Jong, J. D., van den Brink-Muinen, A. and Groenewegen, P. P. (2010), ‘The intention to switch health insurer and actual switching behaviour: are there differences between groups of people?’, Health Expectations, 13(2): 195–207.Google Scholar
Hibbard, J. H., Slovic, P., Peters, E., Finucane, M. L. and Tusler, M. (2001), ‘Is the informed-choice policy approach appropriate for Medicare beneficiaries?’, Health Affairs, 20(3): 199–203.Google Scholar
Hirschman, A. O (1970), Responses to Decline in Firms, Organizations, and States, Cambridge, MA: Harvard University Press.Google Scholar
Hoffmann, F. and Icks, A. (2011), ‘Do persons that changed health insurance differ from those who did not? The case of diabetes’, Experimental and Clinical Endocrinology & Diabetes, 119(9): 569–572.CrossRefGoogle Scholar
Kerssens, J. J. and Groenewegen, P. P. (2005), ‘Consumer preferences in social health insurance’, European Journal of Health Economics, 6(1): 8–15.CrossRefGoogle ScholarPubMed
Lako, C. J., Rosenau, P. and Daw, C. (2011), ‘Switching health insurance plans: results from a health survey’, Health Care Analysis, 19(4): 312–328.Google Scholar
Laske-Aldershof, T., Schut, E., Beck, K., Greß, S., Shmueli, A. and van de Voorde, C. (2004), ‘Consumer mobility in social health insurance markets: a five-country comparison’, Applied Health Economics and Health Policy, 3(4): 229–241.Google Scholar
Marzilli Ericson, K. M (2012), Consumer Inertia and Firm Pricing in the Medicare Part D Description Drug Insurance Exchange, Cambridge: National Bureau of Economic Research.Google Scholar
Mosca, I. and Schut-Welkzijn, A. (2008), ‘Choice determinants of the mobility in the Dutch health insurance market’, The European Journal of Health Economics, 9(3): 261–264.CrossRefGoogle ScholarPubMed
Nosal, K (2012), ‘Estimating switching costs for Medicare Advantage Plans’. Working paper.Google Scholar
Nuscheler, R. and Knaus, T. (2005), ‘Risk selection in the German public health insurance system’, Health Economics, 14(12): 1253–1271.Google Scholar
NZa (2009), Monitor Zorgverzekeringsmarkt 2009. Trends en Acties van de NZa, Utrecht: Dutch Healthcare Authority.Google Scholar
NZa (2010), Marktscan Zorgverzekeringsmarkt 2010. Een Scan van de Belangrijkste Indicatoren, Utrecht: Dutch Healthcare Authority.Google Scholar
NZa (2011), Marktscan Zorgverzekeringsmarkt. Weergave van de markt 2007–2011, Utrecht: Dutch Healthcare Authority.Google Scholar
NZa (2012), Marktscan Zorgverzekeringsmarkt. Weergave van de markt 2008–2012, Utrecht: Dutch Healthcare Authority.Google Scholar
Pomp, M., Shestalova, V. and Rangel, L. (2005), Switch on the Competition. Causes, Consequences and Policy Implications of Consumer Switching Costs, Den Haag: CPB Netherlands Bureau for Economic Policy Analysis.Google Scholar
Reitsma-van Rooijen, M., de Jong, J. D. and Rijken, M. (2011), ‘Regulated competition in health care: switching and barriers to switching in the Dutch health insurance system’, BMC Health Services Research, 11: 95–104.Google Scholar
Roos, A. F. and Schut, F. T. (2012), ‘Spillover effects of supplementary on basic health insurance: evidence from the Netherlands’, The European Journal of Health Economics, 13(1): 51–62.Google Scholar
Samuelson, W. and Zeckhauser, R. (1988), ‘Status quo bias in decision making’, Journal of Risk and Uncertainty, 1(1): 7–59.CrossRefGoogle Scholar
Scanlon, D. P., Chernew, M. and Lave, J. R. (1997), ‘Consumer health plan choice: current knowledge and future directions’, Annual Review of Public health, 18: 507–528.Google Scholar
Schlesinger, M., Druss, B. and Thomas, T. (1999), ‘No exit? The effect of health status on dissatisfaction and disenrollment from health plans’, Health Services Research, 34(2): 547–576.Google ScholarPubMed
Shmueli, A., Bendelac, J. and Achdut, L. (2007), ‘Who switches sickness funds in Israel?’, Health Economics, Policy and Law, 2(3): 251–265.Google Scholar
Sietsma, A. and Groot Koerkamp, R. (2014), ‘Het gebruik van wijkverpleging door ouderen’, ESB, 99(4680): 148–151.Google Scholar
Strombom, B. A., Buchmueller, T. C. and Feldstein, P. J. (2002), ‘Switching costs, price sensitivity and health plan choice’, Journal of Health Economics, 21(1): 89–116.CrossRefGoogle ScholarPubMed
Tamm, M., Tauchmann, H., Wasem, J. and Greβ, S. (2007), ‘Elasticities of market shares and social health insurance choice in Germany: a dynamic panel data approach’, Health Economics, 16(3): 243–256.Google Scholar
Van de Ven, W. P. M. M (2011), ‘Risk adjustment and risk equalization: what needs to be done?’, Health Economics, Policy and Law, 6(1): 147–156.Google Scholar
Van Kleef, R. C., van Vliet, R. C. J. A. and van de Ven, W. P. M. M. (2013), ‘Risk equalization in the Netherlands: an empirical evaluation’, Expert Review of Pharmacoeconomics & Outcomes Research, 13(6): 829–839.Google Scholar
Vektis (2006), Verzekerdenmobiliteit en keuzegedrag. De feiten over de marktontwikkelingen na invoering van de basisverzekering, Zeist: Vektis.Google Scholar
Vektis (2007), Verzekerdenmobiliteit en keuzegedrag. Hoe staat het ervoor in 2007?, Zeist: Vektis.Google Scholar
Vektis (2008), Verzekerdenmobiliteit en keuzegedrag. Begin of einde van de rust?, Zeist: Vektis.Google Scholar
Vektis (2009), Verzekerdenmobiliteit en keuzegedrag 2009, Zeist: Vektis.Google Scholar
Vektis (2010), Zorgthermometer 2010. Verzekerden in beweging, Zeist: Vektis.Google Scholar
Vektis (2011), Zorgthermometer 2011. Verzekerden in beweging, Zeist: Vektis.Google Scholar
Vektis (2012), Zorgthermometer. Verzekerden in beweging 2012, Zeist: Vektis.Google Scholar
Zhang, K. Z. K., Cheung, C. M. K. and Lee, M. K. O. (2012), ‘Online service switching behavior: the case of blog service providers’, Journal of Electronic Commerce Research, 13(3): 184–197.Google Scholar