Felder, Stefan; Werblow, Andreas:

Swiss Social Health Insurance: Co-payments work

In: DICE-Report Journal for Institutional Comparisons, Jg. 1 (2003) ; Nr. 3, S. 43-46
Zeitschriftenaufsatz / Fach: Wirtschaftswissenschaften
From the perspective of an insurance community,
co-payments are only interesting if they affect total
expenditure by a decrease in the probability or the
size of damages. If the insured take preventive
actions to reduce the risk or change their behavior
when damages occur, their expenditure will
decrease. If insurance coverage is comprehensive,
important incentives for prevention and restricting
damages are absent. Economists speak of moral
hazard, referring to the effect of the extent of
insurance coverage on the behavior of the insured.
In health insurance, the insured have a particularly
large influence on the amount of services they
demand. Healthy food, sufficient physical motion,
prevention of stress, all these reduce the probability
of an illness. Moreover, the behavior in case of
an illness, i.e. the choice of therapy or the patients’
compliance with the physicians’ prescriptions will
substantially affect health care expenditure. Do copayments
reduce moral hazard in health insurance?
Swiss social health insurance is an ideal candidate
for studying this issue, as co-payments have
a long tradition there.