Risk adjustment and the fear of markets: the case of Belgium

• Published in: Health care management science 2000-02, Vol.3 (2), p.121-130
• Main Authors: Schokkaert, E, Van de Voorde, C
• Format: Article
• Language: English
• Subjects: Adult; Adverse selection; Aged; Aged, 80 and over; Ambulatory care; Belgium; Capitation; Capitation Fee - organization & administration; Competition; Costs; Disability insurance; Efficiency; Efficiency, Organizational; Employees; Female; Financing; Financing, Government - organization & administration; Forecasting; Health care access; Health care expenditures; Health care policy; Health Expenditures - statistics & numerical data; Health insurance; Hospital costs; Humans; Insurance premiums; Insurance Selection Bias; Laboratories; Male; Managed Care Programs - organization & administration; Marketing of Health Services - organization & administration; Middle Aged; National Health Programs - organization & administration; Population; Profits; Regression Analysis; Risk Adjustment - organization & administration; Self employment; Statistical analysis; Studies
• ISSN: 1386-9620; 1572-9389

In Belgium the management and administration of the compulsory and universal health insurance is left to a limited number of non-governmental non-profit sickness funds. Since 1995 these sickness funds are partially financed in a prospective way. The risk adjustment scheme is based on a regression model to explain medical expenditures for different social groups. Medical supply is taken out of the formula to construct risk-adjusted capitation payments. The risk-adjustment formula still leaves scope for risk selection. At the same time, the sickness funds were not given the instruments to exert a real influence on expenditures and the health insurance market has not been opened for new entrants. As a consequence, Belgium runs the danger of ending up in a situation with little incentives for efficiency and considerable profits from cream skimming.