IDEAS home Printed from https://ideas.repec.org/a/gam/jrisks/v7y2019i4p114-d284535.html
   My bibliography  Save this article

On Market Share Drivers in the Swiss Mandatory Health Insurance Sector

Author

Listed:
  • Dalit Daily-Amir

    (Department of Actuarial Science, Faculty of Business and Economics, University of Lausanne, 1015 Lausanne, Switzerland)

  • Hansjörg Albrecher

    (Department of Actuarial Science, Faculty of Business and Economics, University of Lausanne, 1015 Lausanne, Switzerland
    Swiss Finance Institute, 1015 Lausanne, Switzerland)

  • Martin Bladt

    (Department of Actuarial Science, Faculty of Business and Economics, University of Lausanne, 1015 Lausanne, Switzerland)

  • Joël Wagner

    (Department of Actuarial Science, Faculty of Business and Economics, University of Lausanne, 1015 Lausanne, Switzerland
    Swiss Finance Institute, 1015 Lausanne, Switzerland)

Abstract

In the mandatory health insurance market in Switzerland, a range of insurers offer policies that differ in characteristics like premium and service level while benefits are the same and regulated by law. In this paper, we give an overview of the market and analyse the relationship between insurers’ characteristics and the evolution of their market shares. Indeed, in view of substantial differences between the players, the risk that policyholders change their provider is important. We develop a linear model with two-sided lognormally distributed errors and use publicly available data on the Swiss mandatory health insurance market for the years from 2002 to 2015. Thereby we identify and quantify the main drivers for the policyholders’ switching behavior that reflect in changes in market shares. The results suggest that market share changes are particularly linked to the difference between an insurer’s premium and the overall market premium. In addition, the difference to the previous year’s premium also has an impact on the market share while the service level as well as the group affiliation of a provider turn out not be significant in explaining annual market share changes.

Suggested Citation

  • Dalit Daily-Amir & Hansjörg Albrecher & Martin Bladt & Joël Wagner, 2019. "On Market Share Drivers in the Swiss Mandatory Health Insurance Sector," Risks, MDPI, vol. 7(4), pages 1-25, November.
    • Handle: RePEc:gam:jrisks:v:7:y:2019:i:4:p:114-:d:284535
    as

    Download full text from publisher

    File URL: https://www.mdpi.com/2227-9091/7/4/114/pdf
    Download Restriction: no
    File URL: https://www.mdpi.com/2227-9091/7/4/114/
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Strombom, Bruce A. & Buchmueller, Thomas C. & Feldstein, Paul J., 2002. "Switching costs, price sensitivity and health plan choice," Journal of Health Economics, Elsevier, vol. 21(1), pages 89-116, January.
    2. Thomson, Sarah & Busse, Reinhard & Crivelli, Luca & van de Ven, Wynand & Van de Voorde, Carine, 2013. "Statutory health insurance competition in Europe: A four-country comparison," Health Policy, Elsevier, vol. 109(3), pages 209-225.
    3. Frank, Richard G. & Lamiraud, Karine, 2009. "Choice, price competition and complexity in markets for health insurance," Journal of Economic Behavior & Organization, Elsevier, vol. 71(2), pages 550-562, August.
    4. Jean Pinquet & Montserrat Guillén & Mercedes Ayuso, 2011. "Commitment and Lapse Behavior in Long‐Term Insurance: A Case Study," Journal of Risk & Insurance, The American Risk and Insurance Association, vol. 78(4), pages 983-1002, December.
    5. Marcus C. Christiansen & Martin Eling & Jan-Philipp Schmidt & Lorenz Zirkelbach, 2016. "Who is Changing Health Insurance Coverage? Empirical Evidence on Policyholder Dynamics," Journal of Risk & Insurance, The American Risk and Insurance Association, vol. 83(2), pages 269-300, June.
    6. repec:dau:papers:123456789/1623 is not listed on IDEAS
    7. Brigitte Dormont & Pierre‐Yves Geoffard & Karine Lamiraud, 2009. "The influence of supplementary health insurance on switching behaviour: evidence from Swiss data," Health Economics, John Wiley & Sons, Ltd., vol. 18(11), pages 1339-1356, November.
    8. Chris M. Wilson & Catherine Waddams Price, 2010. "Do consumers switch to the best supplier?," Oxford Economic Papers, Oxford University Press, vol. 62(4), pages 647-668, October.
    9. Francesca Colombo, 2001. "Towards More Choice in Social Protection?: Individual Choice of Insurer in Basic Mandatory Health Insurance in Switzerland," OECD Labour Market and Social Policy Occasional Papers 53, OECD Publishing.
    10. Hendrik Schmitz & Nicolas R. Ziebarth, 2017. "Does Price Framing Affect the Consumer Price Sensitivity of Health Plan Choice?," Journal of Human Resources, University of Wisconsin Press, vol. 52(1), pages 88-127.
    11. Wuppermann, Amelie C. & Bauhoff, Sebastian & Grabka, Markus M., 2014. "The Price Sensitivity of Health Plan Choice: Evidence from Retirees in the German Social Health Insurance," Discussion Papers in Economics 21080, University of Munich, Department of Economics.
    12. Cummins, J. David & Xie, Xiaoying, 2008. "Mergers and acquisitions in the US property-liability insurance industry: Productivity and efficiency effects," Journal of Banking & Finance, Elsevier, vol. 32(1), pages 30-55, January.
    13. Samuelson, William & Zeckhauser, Richard, 1988. "Status Quo Bias in Decision Making," Journal of Risk and Uncertainty, Springer, vol. 1(1), pages 7-59, March.
    14. Dutang, Christophe & Albrecher, Hansjoerg & Loisel, Stéphane, 2013. "Competition among non-life insurers under solvency constraints: A game-theoretic approach," European Journal of Operational Research, Elsevier, vol. 231(3), pages 702-711.
    15. Abraham, Jean M. & Feldman, Roger & Carlin, Caroline & Christianson, Jon, 2006. "The effect of quality information on consumer health plan switching: Evidence from the Buyers Health Care Action Group," Journal of Health Economics, Elsevier, vol. 25(4), pages 762-781, July.
    16. Annette Hofmann & Mark Browne, 2013. "One-sided commitment in dynamic insurance contracts: Evidence from private health insurance in Germany," Journal of Risk and Uncertainty, Springer, vol. 46(1), pages 81-112, February.
    17. Goldman, Dana & Leibowitz, Arleen & Robalino, David, 2004. "Employee Responses to Health Insurance Premium Increases," MPRA Paper 12004, University Library of Munich, Germany.
    18. Wuppermann, Amelie & Bauhoff, Sebastian & Grabka, Markus, 2014. "The Price Sensitivity of Health Plan Choice among Retirees: Evidence from the German Social Health Insurance," VfS Annual Conference 2014 (Hamburg): Evidence-based Economic Policy 100352, Verein für Socialpolitik / German Economic Association.
    19. Hansjörg Albrecher & Daily-Amir Dalit, 2017. "On effects of asymmetric information on non-life insurance prices under competition," International Journal of Data Analysis Techniques and Strategies, Inderscience Enterprises Ltd, vol. 9(4), pages 287-299.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Claire Mouminoux & Christophe Dutang & Stéphane Loisel & Hansjoerg Albrecher, 2022. "On a Markovian Game Model for Competitive Insurance Pricing," Methodology and Computing in Applied Probability, Springer, vol. 24(2), pages 1061-1091, June.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Tamara Bischof & Christian P.R. Schmid, 2018. "Consumer price sensitivity and health plan choice in a regulated competition setting," Health Economics, John Wiley & Sons, Ltd., vol. 27(9), pages 1366-1379, September.
    2. Duijmelinck, Daniëlle M.I.D. & Mosca, Ilaria & van de Ven, Wynand P.M.M., 2015. "Switching benefits and costs in competitive health insurance markets: A conceptual framework and empirical evidence from the Netherlands," Health Policy, Elsevier, vol. 119(5), pages 664-671.
    3. Brigitte Dormont & Pierre-Yves Geoffard & Karine Lamiraud, 2012. "Assurance maladie en Suisse : les assurances supplémentaires nuisent-elles à la concurrence sur l'assurance de base ?," Économie et Statistique, Programme National Persée, vol. 455(1), pages 71-87.
    4. Karine Lamiraud & Pierre Stadelmann, 2020. "Switching costs in competitive health insurance markets: The role of insurers' pricing strategies," Health Economics, John Wiley & Sons, Ltd., vol. 29(9), pages 992-1012, September.
    5. Pilny, Adam & Wübker, Ansgar & Ziebarth, Nicolas R., 2017. "Introducing risk adjustment and free health plan choice in employer-based health insurance: Evidence from Germany," Journal of Health Economics, Elsevier, vol. 56(C), pages 330-351.
    6. Bünnings, Christian & Schmitz, Hendrik & Tauchmann, Harald & Ziebarth, Nicolas R., 2015. "How health plan enrollees value prices relative to supplemental benefits and service quality," FAU Discussion Papers in Economics 02/2015, Friedrich-Alexander University Erlangen-Nuremberg, Institute for Economics.
    7. Christian Bünnings & Hendrik Schmitz & Harald Tauchmann & Nicolas R. Ziebarth, 2015. "How Health Plan Enrollees Value Prices Relative to Supplemental Benefits and Service Quality," Ruhr Economic Papers 0545, Rheinisch-Westfälisches Institut für Wirtschaftsforschung, Ruhr-Universität Bochum, Universität Dortmund, Universität Duisburg-Essen.
    8. repec:dau:papers:123456789/11294 is not listed on IDEAS
    9. Juan Pablo Atal & Hanming Fang & Martin Karlsson & Nicolas R. Ziebarth, 2019. "Exit, Voice, or Loyalty? An Investigation Into Mandated Portability of Front‐Loaded Private Health Plans," Journal of Risk & Insurance, The American Risk and Insurance Association, vol. 86(3), pages 697-727, September.
    10. Jonas Pendzialek & Dusan Simic & Stephanie Stock, 2016. "Differences in price elasticities of demand for health insurance: a systematic review," The European Journal of Health Economics, Springer;Deutsche Gesellschaft für Gesundheitsökonomie (DGGÖ), vol. 17(1), pages 5-21, January.
    11. repec:zbw:rwirep:0545 is not listed on IDEAS
    12. Marcus C. Christiansen & Martin Eling & Jan-Philipp Schmidt & Lorenz Zirkelbach, 2016. "Who is Changing Health Insurance Coverage? Empirical Evidence on Policyholder Dynamics," Journal of Risk & Insurance, The American Risk and Insurance Association, vol. 83(2), pages 269-300, June.
    13. Thomson, Sarah & Busse, Reinhard & Crivelli, Luca & van de Ven, Wynand & Van de Voorde, Carine, 2013. "Statutory health insurance competition in Europe: A four-country comparison," Health Policy, Elsevier, vol. 109(3), pages 209-225.
    14. Brigitte Dormont & Pierre-Yves Geoffard & Karine Lamiraud, 2007. "The influence of supplementary health insurance on switching behaviour: evidence on Swiss data," PSE Working Papers halshs-00587785, HAL.
    15. Juan Pablo Atal & Hanming Fang & Martin Karlsson & Nicolas R. Ziebarth, 2020. "Long-Term Health Insurance: Theory Meets Evidence," PIER Working Paper Archive 20-009, Penn Institute for Economic Research, Department of Economics, University of Pennsylvania.
    16. Mark Stabile & Sarah Thomson, 2014. "The Changing Role of Government in Financing Health Care: An International Perspective," Journal of Economic Literature, American Economic Association, vol. 52(2), pages 480-518, June.
    17. Rudy Douven & Marco Ligthart & H. Lieverdink & I. Vermeulen, 2007. "Measuring annual price elasticities in Dutch health insurance; a new method," CPB Discussion Paper 90, CPB Netherlands Bureau for Economic Policy Analysis.
    18. Afendulis, Christopher C. & Sinaiko, Anna D. & Frank, Richard G., 2015. "Dominated choices and Medicare Advantage enrollment," Journal of Economic Behavior & Organization, Elsevier, vol. 119(C), pages 72-83.
    19. repec:hal:spmain:info:hdl:2441/3ihldo33ik9ee94procjtfki5f is not listed on IDEAS
    20. Conor Keegan & Conor Teljeur & Brian Turner & Steve Thomas, 2019. "Switching benefits and costs in the Irish health insurance market: an analysis of consumer surveys," International Journal of Health Economics and Management, Springer, vol. 19(1), pages 15-32, March.
    21. Martin Gaynor & Kate Ho & Robert J. Town, 2015. "The Industrial Organization of Health-Care Markets," Journal of Economic Literature, American Economic Association, vol. 53(2), pages 235-284, June.
    22. Schmitz, Hendrik & Ziebarth, Nicolas R., 2011. "In Absolute or Relative Terms? How Framing Prices Affects the Consumer Price Sensitivity of Health Plan Choice," IZA Discussion Papers 6241, Institute of Labor Economics (IZA).
    23. Anna D. Sinaiko & Christopher C. Afendulis & Richard G. Frank, 2013. "Enrollment in Medicare Advantage Plans in Miami-Dade County: Evidence of Status Quo Bias?," NBER Working Papers 19639, National Bureau of Economic Research, Inc.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:gam:jrisks:v:7:y:2019:i:4:p:114-:d:284535. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: MDPI Indexing Manager (email available below). General contact details of provider: https://www.mdpi.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.