Consumer price sensitivity in Dutch health insurance.
OBJECTIVE
To estimate the price sensitivity of consumer choice of health insurance firm.


METHODS
Using paneldata of the flows of insured between pairs of Dutch sickness funds during the period 1993-2002, we estimate the sensitivity of these flows to differences in insurance premium.


RESULTS
The price elasticity of residual demand for health insurance was low during the period 1993-2002, confirming earlier findings based on annual changes in market share. We find small but significant elasticities for basic insurance but insignificant elasticities for supplementary insurance. Young enrollees are more price sensitive than older enrollees.


CONCLUSIONS
Competition was weak in the market for health insurance during the period under study. For the market-based reforms that are currently under way, this implies that measures to promote competition in the health insurance industry may be needed.
van Dijk
Machiel
M
Central Planning Bureau, P.O. Box 80510, 2508 GM The Hague, The Netherlands.
Pomp
Marc
M
Douven
Rudy
R
Laske-Aldershof
Trea
T
Schut
Erik
E
de Boer
Willem
W
de Boo
Anne
A
D000328:Adult; D000367:Age Factors; D003258:Consumer Behavior / Q000191:economics* / Q000706:statistics & numerical data; D003365:Costs and Cost Analysis; D003657:Decision Making; D004465:Economic Competition; D005249:Fees and Charges / Q000706:statistics & numerical data* / Q000639:trends; D005260:Female; D018166:Health Care Reform / Q000191:economics; D006801:Humans; D007348:Insurance, Health / Q000145:classification / Q000191:economics*; D008297:Male; D018854:Managed Competition / Q000191:economics*; D008875:Middle Aged; D017059:Models, Econometric; D009313:National Health Programs / Q000191:economics; D009426:Netherlands; D019472:Universal Health Insurance / Q000191:economics